Direct MTPL Settlement in Ukraine in 2026: How Motor Insurance Changes for Drivers
Starting in 2026, direct settlement has become a mandatory standard for all MTPL (OSCPV) contracts in Ukraine. After a road accident, in most cases the injured party applies for compensation to their own insurance company rather than to the insurer of the at-fault driver, as was the case before. This marked the end of the transitional period that lasted through 2025, when policies with both the old and the new settlement logic were simultaneously in circulation. This change is not technical but systemic. It effectively rebuilds the logic of motor third-party liability insurance, shifting the focus from a formal policy to real post-accident service.
The system of direct settlement is administered by the Motor (Transport) Insurance Bureau of Ukraine, which ensures financial clearing between insurance companies and the stable functioning of the entire model. The mechanism of direct settlement itself is not new it has existed since 2016, but on a voluntary basis and covered only part of the market. As of the end of 2024, only 11 insurers were involved, making the system fragmented and largely invisible to most drivers. From 2025, participation in direct settlement became mandatory for all insurers, and the MTIBU joined the system as a clearing center. This made it possible to extend the mechanism even to cases where the at-fault driver did not have a valid MTPL policy in such situations, the injured party can still apply to their own insurer and receive compensation. To speed up inter-insurer settlements, the market moved to classifying losses by payout size. The system defines two classes: up to UAH 100,000 and over UAH 100,000. This standardization made it possible to reduce settlement times. In January–September 2025, the average settlement period within the direct settlement system was 29 days, almost twice as fast as under the classic procedure.
Statistics show rapid uptake of the new model. The share of claims handled through direct settlement already exceeds 21% of all property damage claims, while the average payout amounts to about UAH 44,000. The number of claims filed with one’s “own” insurer grew from 618 in January to 4,260 in September 2025. In total, more than 17,000 insurance cases were settled over nine months. The key difference of the new model is that the injured party is no longer dependent on the service quality of the at-fault driver’s insurer. Previously, the speed and fairness of compensation were effectively a lottery: if the at-fault driver’s insurer provided poor service, the process could drag on for months. Now, responsibility for settlement lies with the company with which the driver has a contract and to which they pay insurance premiums. At the same time, direct settlement has clearly defined limits of application. It works only in cases of property damage, when two vehicles are involved in the accident. If there is damage to life or health, or if more than two vehicles are involved, the classic procedure applies. The mechanism also does not work in accidents involving special machinery or road trains. The driver’s action algorithm after an accident in the new system begins with immediate contact with their own insurance company. The first minutes after the incident often determine whether settlement will be quick and conflict-free or turn into a prolonged process. Legislation предусматривает contacting only one insurer parallel applications can complicate the procedure.
After the insurance event is registered, the insurance company organizes the vehicle inspection, damage assessment, and together with the client determines the compensation format repair at a service station or a cash payout. Priority is given to restoring the vehicle. The insurer must offer at least three service stations within 150 km of the owner’s residence or the vehicle’s location. At the same time, the client may propose their own service station, provided the repair cost is market-based and the damage is directly related to the accident. A cash payout is also possible in cases of total loss of the vehicle or by agreement of the parties. Compensation is paid within the statutory liability limit of up to UAH 250,000 and is calculated excluding VAT, after which the owner independently arranges the repair. Insurers actively use digital tools: online incident registration, remote document collection, photo and video evidence. This not only speeds up the process but also reduces the number of disputes over the extent of damage.
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The most common problems in the new system arise not from the direct settlement mechanism itself, but from driver errors. Incorrect use of the European accident statement, ignoring exceptions, or insufficient documentation of accident circumstances can negate the advantages of the new model. That is why experts emphasize the importance of obtaining initial guidance from the insurer immediately after an accident. The introduction of mandatory direct settlement has changed the very philosophy of MTPL insurance. The policy ceases to be a formality and becomes a service instrument, where service quality, response speed, and procedural transparency become decisive. For drivers, this means more predictable compensation; for insurers, it means new competition for customers based not on price, but on service.
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