Direct Settlement of MTPL in 2026: What Changes for Drivers After an Accident
From 2026, compulsory motor third-party liability insurance in Ukraine works differently. Mandatory direct settlement has been introduced for all MTPL (OSCPV) contracts. This is one of those changes that may look technical on paper but is clearly felt in real life especially after a road accident. The core idea of the new rules is simple: the injured party no longer applies to the insurer of the at-fault driver. Compensation or repairs are handled by their own insurance company. This shift in logic fundamentally changes the experience for drivers.
Previously, the aftermath of an accident often depended on chance. The injured driver had to deal with the insurer of the other party. If that insurer provided decent service, the process moved relatively smoothly. If not, compensation could be delayed for months. Now the mechanism is different. Motor insurance works in both directions:
- if a driver caused the accident, their insurer compensates the injured party;
- if a driver is the injured party, they turn to their own insurer.
As a result, the quality of service provided by the insurer becomes important for the policyholder themselves, not for some unknown third party.
Why the process has become faster
According to Motor (Transport) Insurance Bureau of Ukraine, in 2025 the average settlement period under direct settlement was 29 days. This is almost twice as fast as under the classic model.
The acceleration became possible due to several practical changes:
- classification of claims by amount:
Class I up to UAH 100,000;
Class II over UAH 100,000; - centralised settlements between insurance companies;
- digital tools: online registration of claims, photo and video documentation of damage, remote submission of documents.
The system operates within clearly defined scenarios where decisions can be standardised. This is what makes timelines more predictable.
What compensation options drivers receive
After the accident is registered, the insurance company arranges an inspection of the vehicle and an assessment of damage. The injured party is then offered two options.
The first option is repair at a service station.
The insurer directs the vehicle to a partner service station with which it has contractual arrangements. This allows control over timelines and quality of work. At the same time, the driver may suggest their own service station, provided the repair cost remains within market limits.
The second option is a cash payment.
This applies in cases of total loss of the vehicle or by agreement of the parties. The payment is made within the statutory liability limit of up to UAH 250,000. After receiving the funds, the vehicle owner independently organises repairs.
It is important to note that in the case of a cash payment, compensation is calculated without VAT.
When direct settlement does not apply
The mechanism has clearly defined limits. Direct settlement applies only to property damage when:
- two vehicles are involved in the accident;
- there is no damage to life or health.
The classic procedure is used if:
- there are injuries or fatalities;
- more than two vehicles are involved;
- the accident involves special machinery or a road train.
Incorrect assessment of whether direct settlement applies is one of the most common causes of complications during claims processing.
What matters immediately after an accident
The speed and simplicity of settlement largely depend on the first minutes after the accident. The driver should:
- record the circumstances of the accident using photos and videos;
- complete a police report or a European accident statement, depending on the situation;
- contact the insurance company and receive initial guidance.
The law предусматривает contacting only one insurer either one’s own insurance company or the insurer of the at-fault driver. Parallel claims may complicate the process.
The Motor (Transport) Insurance Bureau of Ukraine acts as the administrator and clearing centre of the direct settlement system. The Bureau guarantees settlements between insurers and ensures the stability of the mechanism. Importantly, with the mandatory involvement of the MTIBU, injured parties gained the right to apply to their own insurer even when the at-fault driver did not have a valid motor insurance policy.
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How the logic of motor insurance has changed
Previously, MTPL policies were often purchased with a single criterion in mind the lowest price. The level of service provided by the insurer rarely mattered. From 2026, the situation is different. Motor insurance is no longer a formality. Insurance companies are chosen with the understanding that they:
- provide post-accident support;
- organise repairs or payments;
- determine how quickly and smoothly the claim will be settled.
Mandatory direct settlement has not eliminated all difficulties after road accidents. However, it has reduced dependence on the insurer of the at-fault party, shortened settlement times, and made the process more transparent. From 2026, motor insurance in Ukraine shifts from a formal policy to a real service. And this change is felt not in legal texts, but on the road at the moment when it truly matters.
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