Compulsory insurance within the transport sector

Vehicle owners are obliged to conclude an insurance agreement before using their vehicles

Compulsory insurance within the transport sector includes:

• Accident insurance for passengers in public transport
• Insurance for owners or users of vehicles against liability for damage caused to third parties (motor vehicle liability insurance)
• Insurance for air carriers or aircraft operators against liability for damage caused to third parties,
• Insurance of owners or users of motor boats or yachts against liability for damage caused to third parties.

Vehicle owners are obliged to conclude an insurance agreement before using their vehicles and extend this agreement for as long as they are using the vehicle in traffic.

An agreement on compulsory motor vehicle liability insurance is concluded for the period of one or several years and has to cover damage incurred in the territory of the Republic of Croatia and the territories of the countries in the green card insurance system.

An insurance agreement concluded in the Republic of Croatia and an insurance policy issued are valid when travelling to in other European Union member states in accordance with the contractual insurance coverage period. With this insurance, the insured owner and user of the vehicle are liable for the damage caused to third parties. Moreover, the insurance taken out by the vehicle owner or user against liability for damage caused to third parties also covers the damage caused by persons who take part in using the vehicle with the owner’s approval.

In the Republic of Croatia, risk assessment is most commonly based on the bonus-malus system, which assessment depends on the result of processing of the damage claimed in the previous contractual period of insurance coverage. Furthermore, insurance companies carry out risk assessment themselves and take into account vehicle category, engine power, vehicle load, risk areas, the owner's age, etc.

Drivers are obliged to have the insurance policy or proof of insurance when using a vehicle in traffic and are obliged to provide personal data and insurance information to all participants of a traffic accident if they are involved in one.

If they do not agree with the amount of the indemnity recognized by the insurance company or if they do not agree with a different decision of the insurance company, the injured party can first lodge a complaint to the competent insurance company in accordance with Article 378(1) of the Insurance Act.

Notwithstanding the foregoing, the injured party can also initiate mediation proceedings before the Mediation Centre of the Croatian Insurance Bureau, and can also bring an action before the competent court.

When the party believes that the Code of Insurance and Reinsurance Ethics was violated, they can lodge an appeal to the Insurance Ombudsman with the Croatian Insurance Bureau, Zagreb, Martićeva 73 

Insurance Ombudsman.

However, the Ombudsman is not authorised to give decisions in cases which pertain to property disputes and cannot assess the merits of a claim or its amount.

“Insurance green card”

The “insurance green card” is an international certificate of motor vehicle liability insurance issued by the national insurance bureau as proof of existence of valid motor vehicle liability insurance in the territories of the countries in the Green Card System of insurance.
 
The Croatian Insurance Bureau is, as the national insurance bureau; that is, as the national green card office, a member of the Green Card System, which is comprised of 47 national offices which are members of the Council of Bureaux, whose registered office is in Brussels and the purpose of which is to facilitate international traffic of motor vehicles by allowing insurance against liability for damage caused to third parties by using it pursuant to the conditions prescribed in the country of visit and to warrant to the injured parties that they will be indemnified for the damage they suffered in case of an accident in accordance with that country’s national law.
 
If requested to do so, the Croatian Insurance Bureau delivers to the national bureaus of countries or third countries which are members of the Green Card System the following:

• Information on the area of the Republic of Croatia where the vehicle is usually stationed and its number plates, if any
• Information on the vehicle insurance, usually specified in the green card held by the vehicle user, if this is required by the member country in whose territory the vehicle is usually stationed.

 
The insurance company performing motor vehicle liability insurance activities in the territory of the Republic of Croatia is obliged to list authorised representatives in all other member countries competent for resolution of indemnity claims under motor vehicle liability insurance which for and on behalf of the liable insurer collect the information and take the steps necessary to resolve indemnity claims.

Vehicle with foreign number plates in the Republic of Croatia

A driver entering the territory of the Republic of Croatia in a vehicle with foreign number plates has have a valid international motor vehicle liability insurance document which is valid in the territory of the European Union or some other proof of existence of such insurance covering damage at least up to the amount specified in Article 26(8) of the Act on Compulsory Insurance within the Transport Sector. The police are authorised to check whether these conditions have been met.
 
International documents and proof means the official number plates on the vehicle which is usually stationed in the territory of a country whose national bureau is a signatory of the Multilateral Agreement; that is, it means the green card issued for the vehicle originating from a country whose national bureau is a signatory of the Multilateral Agreement and other documents and proof the validity of which is recognized by the Croatian Insurance Bureau. The validity of international documents and proof is recognized by the Croatian Insurance Bureau by notifying the border control authority of the Republic of Croatia.
 
Recognition of the validity of international documents and proof includes a guarantee of the Croatian Insurance Office for liabilities based on such documents and proof up to the amount specified in Article 26 of the Act on Compulsory Insurance within the Transport Sector, and if the vehicle with foreign number plates has been insured for a larger amount, the Croatian Insurance Bureau will provide a guarantee up to the contractual amount of the insurance coverage.

Drivers of vehicles with foreign number plates who do not have a valid international document or proof of existence of motor vehicle liability insurance are obliged to conclude an agreement on motor vehicle liability insurance (border insurance) valid in the territories of the member countries for the period of their stay in the territory of that member country or for a minimum of 15 days. If a driver of such vehicle does not conclude an insurance agreement before entering the territory of the Republic of Croatia, the vehicle and that driver will be prevented from entering the territory of the Republic of Croatia.

The Croatian Insurance Bureau is competent for the implementation of border insurance.
 
If a traffic officer establishes in the course of an inspection that the driver does not have a valid international document or proof of existence of motor vehicle liability insurance, the officer will prevent further use of the vehicle and order the driver to conclude a motor vehicle liability insurance agreement; that is, to take out border insurance.

If an injured party suffers damage in the Republic of Croatia by use of a vehicle with foreign number plates for which there is a valid international document or proof of existence of motor vehicle liability insurance, this party can submit an indemnity claim to the Croatian Insurance Office.
 
For indemnification for the damage suffered by use of a vehicle from the territory of the countries who are signatories of the Multilateral Agreement which vehicle does not have number plates or has number plates which do not fit or no longer fit the vehicle; that is, for the damage suffered by use of a vehicle for which number plates, insurance plates or other means of identification similar to number plates are not required, the injured party can submit their indemnity claim to the Croatian Insurance Bureau, which is entitled to indemnification from the person liable for the damage in the form of the amount disbursed, interest and costs.

If a citizen of another European Union member state is permanently moving to the Republic of Croatia, the motor vehicle liability insurance taken out for this person’s vehicle with foreign number plates is valid for the contractual period.

If you are taking out insurance in the Republic of Croatia for a vehicle with foreign number plates, the Act on Compulsory Insurance within the Transport Sector does not prescribe the obligation of recognition of the history of claimed damage in a different European Union member state, so the insurance companies decide on this at their own discretion. If the insurance company recognizes the bonus-malus system, then the conditions under which this is recognized are usually stated in the insurance terms and conditions, but can also be set out in the insurance company’s price list. The conditions under which documents pertaining to the history of claimed damage can be recognized in a different European Union member state depend on what the insurance company prescribed in its insurance terms and conditions.

European accident statement

Insurance companies are obliged to issue European accident statement forms to policy holders together with motor vehicle liability insurance policies. Drivers are obliged to have a European accident statement form when using a vehicle in traffic and are obliged to hand it over at the request of a traffic officer. In case of an accident, the participants have to fill in, sign and exchange European accident statement forms.

The said statement can be used as an indemnity claim; that is, as a statement on the circumstances which led to the harmful event.

Insurance for a towing vehicle or a trailer

Motor vehicle liability insurance covers the damage caused by a towing vehicle and the damage caused by a trailer. If the damage was caused by a towing vehicle or a trailer while the two vehicles were connected and comprised one whole or if the damage was caused during the ride after the trailer was disconnected, the owners of both vehicles are jointly and severally liable for the damage suffered by third parties, and the injured party can submit the indemnity claim to the insurer of the towing vehicle or the insurer of the trailer. However, the insurance company which concluded the insurance contract with the owner of the towing vehicle and which indemnified the injured party is entitled to compensation of the amount disbursed, interest and costs from the insurer of the trailer if that insurer’s insured person is liable for the damage within its scope of liability.

If the vehicle is subject to obligatory registration and is required to have a log book pursuant to the registration regulations, the authority competent for registration may issue a log book or other appropriate document or extend its validity only once the owner of the vehicle in whose name the vehicle will be registered presents proof of having concluded an insurance agreement on the insurance required under the Act on Compulsory Insurance. It follows from the above that even trailers which are subject to the obligatory registration have to have a separately issued insurance policy. This also applies to trailers from European Union member states.