Overview: what are the most common motor own damage insurance cases?

Four years ago, a proxy payment solution arrived in the mobile app of all major banks in Estonia, which allows payments to be made only on the basis of the recipient’s phone number. Today, according to Eesti Pank, it already has more than 350 thousand users.

It is known that motor third-party liability insurance is helpful in a situation where damage to a vehicle has been caused by another vehicle, and it is clear who caused the situation: the damage is indemnified by the motor third-party liability insurance provider of the driver who caused the damage. However, there are also a number of situations in traffic where the person who caused the damage is unknown or damage to the vehicle occurs in such a way that the other driver does not participate in it. In this case, the motor third-party liability insurance of the damaged vehicle is not helpful in indemnifying the repair costs and only the motor own damage insurance is an option. It is also helpful in repairing the vehicle of the driver who caused the damage, which is not covered by the motor third-party liability insurance.

One of the most common damages covered by motor own damage insurance is the common traffic accident: for example, colliding with another vehicle, crashing into an object, or driving off the road. Such cases, for instance, account for nearly half of the total damage covered by the motor own damage insurance of LHV Kindlustus. Various types of glass damage are also frequent, accounting for almost 35% of the damage covered by the motor own damage insurance.

Cold weather causes more unexpected damage

At the beginning of autumn and winter, some weirder situations may occur: for example, there have been cases in which rodents have damaged the wires or other parts of a vehicle. Such costs are also covered by motor own damage insurance. Collisions with wildlife are responsible for damage that is mostly beyond the driver’s control and often quite significant. A person can be confident in their own driving skills, but whether an animal will suddenly run across the road out of a dark forest cannot be predicted in advance.

It is often surprising to people that if the damage is caused, for example, by a bicycle or an electric scooter, motor third-party liability insurance is not helpful and indemnification for the damage can only be claimed directly from the person who caused the damage. In this case, motor own damage insurance can help, under which the client can have their vehicle repaired and the insurance company will then make a claim against the person who caused the damage.

Repair costs remain high

Vehicle repair costs have remained high in recent years. For example, the cost of average glass damage remains at EUR 700, while the average cost of bodywork is close to EUR 1,800. Even in minor cases, where a car door makes a dent in the door or wing of another car in a car park and the paintwork is damaged, the cost of repair can be up to EUR 1,000.

Based on the example of LHV Kindlustus, the average annual cost of motor own damage insurance is EUR 750–800: the exact price depends on the specific plan, the amount of the insurance deductible, and the selected additional covers. The insurance history of the responsible user or owner of the vehicle is also reviewed. The model, age, and power of the insured vehicle and the area where the owner drives are also relevant.

The popularity of motor own damage insurance in general does not depend on the make of vehicle: for example, LHV provides insurance to the same vehicles that are generally the most popular in Estonia, i.e. Volkswagen, Toyota, BMW, Škoda, Audi, and Volvo. However, the average age of the insured vehicle is often linked to the leasing period: on average, LHV’s motor own damage insurance portfolio includes vehicles aged 3–4 years.