Bulgarian Government Proposes Costlier 'Civil Liability' for High-Risk Drivers

The Bulgarian government has endorsed changes to the Insurance Code today, suggesting that drivers who cause more accidents should face higher premiums for compulsory third-party insurance. This proposal, long-awaited, seeks to overhaul the system of determining insurance premiums, introducing a mechanism known as bonus-malus, where discounts are offered for accident-free driving while penalties apply for involvement in road accidents.

The decision, announced by the Government Information Service, comes after months of public consultation initiated last October. Now, these revisions are set to be deliberated upon and potentially adopted by the National Assembly, signaling a significant shift in insurance regulations.

The proposed amendments align with the requirements of Directive (EU) 2021/2118, amending Directive 2009/103/EC, pertaining to Civil Liability insurance for motor vehicles usage. Notably, the changes aim to centralize the issuance of insurance claims certificates by the Guarantee Fund, streamlining the process of collecting data on damages caused by vehicle usage, irrespective of the insurer involved.

Furthermore, the revisions introduce updated minimum insurance amounts, underscoring the government's commitment to enhancing compensation standards for victims of accidents. For non-property and property damages resulting from bodily injury or death, the minimum coverage is set at BGN 10,420,000 per event, with an equivalent of EUR 6,450,000. Similarly, for property damage, the minimum coverage stands at BGN 2,100,000 per event, or EUR 1,300,000.

Additionally, the amendments propose changes to the funding mechanism for the Provident Fund under Civil Liability, managed by the Guarantee Fund. Under the new regime, insurance companies will contribute to the fund as a percentage of the insurance premium charged, ensuring a more sustainable financial mechanism.

Moreover, the bill introduces new definitions for "vehicle" and "use of a vehicle" while exempting certain categories such as trailers, self-propelled machinery, and individual electric vehicles from the obligation to insure.

These proposed changes, if enacted, promise to harmonize Bulgaria's insurance practices with EU standards, offering greater protection to both drivers and accident victims while promoting safer road behaviors.

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