How to Claim Compensation Under Ukraine's New Mandatory Direct Settlement Rule for Auto Insurance

Navigating Ukraine's New Mandatory Direct Settlement for Auto Insurance Claims

According to Главком: Ukraine operates a compulsory third-party liability (CTPL) insurance system for motorists. A significant change took effect in 2025, making the 'direct settlement' procedure mandatory for all insurers in the CTPL market. This reform allows drivers involved in an accident to file a claim for material damages directly with their own insurance provider, rather than the insurer of the at-fault party. This system is common in many European countries and is designed to streamline the claims process for victims.

The direct settlement rule applies exclusively to material damage sustained by the claimant's vehicle. While a partial version existed previously, the fully mandatory system launched in 2025 aims to deliver compensation faster and with less bureaucratic hassle for policyholders. The key benefits of this new approach include:

• Faster claims processing times;
• Improved customer service;
• Enhanced quality control by the insurer.

The Step-by-Step Claims Process

To receive compensation under the new rules, policyholders must follow a specific procedure. First, the accident must be properly documented at the scene. Next, the policyholder must notify their own insurance company of the incident within three business days of the accident occurring. The following step is to submit a complete package of documents, which must include:

• A formal claim notification;
• Copies of the claimant's passport;
• A copy of the taxpayer identification number;
• A copy of the driver's license;
• A copy of the vehicle registration certificate;
• The valid CTPL insurance policy;
• All evidence collected from the accident scene.

Upon receiving the complete dossier, the insurer will then assess the damages and determine the compensation amount.

The introduction of mandatory direct settlement for CTPL is a major step in the development of Ukraine's insurance market, making the compensation process more transparent and accessible for citizens. This innovation seeks to simplify claims for accident victims by reducing their reliance on dealing with the at-fault driver's insurer. By significantly cutting claim processing times, the system is expected to increase customer satisfaction and improve the overall efficiency of the insurance sector in Ukraine. Over time, successful implementation could reduce disputes between insurers and claimants, positively impacting the industry's reputation.