On the basis of Art. 10 Para. (6) of the Gov. Dec. No. 171/2000 (X.13.) regarding compulsory motor liability insurance of the user of a motor vehicle, the organisation responsible for the management of the Indemnity Account is entitled to recover from the uninsured user of the vehicle all indemnities paid to the claimant plus all expenses incurred in connection with the settlement. With special regard to the interests of those who are properly insured and regularly paying the premium, we would consider as our special duty to exercise this legal right, since the very moment of the establishment of our office.
As a rule, upon the receipt of a new claim, we are making an immediate attempt to get in touch with the liable owner of the vehicle , asking for missing details and circumstances of the accident, as well as undisclosed particulars of an(existing but unknown) insurance contract. At the same time we are advising him/her of the consequences of breaching his/her obligation to conclude an insurance contract. To our greatest regret, we are very rarely provided with an answer, resulting in a delay in the claim settlement and ultimately an increase of the financial burden of the uninsured user.
When effecting our first outpay to the claimant, together with any further payments in the future, we always send the uninsured user of the vehicle a dunning letter containing the amount of indemnity paid as well as indicating and justifying the different titles of the claim.
There are cases, where the user, following our request, does express his/her willingness to pay. Based on careful considerations regarding the financial capabilities of the debtor, we are always prepared to come to a reasonable agreement regarding the modalities of payment and the instalments or even the extent of the claim as well.
Should the user ignore our request to pay, we are taking the necessary legal steps to enforce our claim, requesting the court to issue an order for payment. However, we are prepared to consider a reasonable and mutually beneficial agreement, even in the course of a court proceeding or after a final judgement. In case of no payment or no amical settlement, we do not have any other way than enforceing our claim.
Practical recommendations, all you need to know about your duties in connection with TPL
The obligation to conclude the insurance contract and the stipulations regarding the legal consequences of not having one have already been introduced more than 10 years ago. To our knowledge these rules are not yet commonly and precisely known to the public. This might be attributed to several factors, such as the frequent modifications of the TPL law, misunderstandings arising from the discrepancy between the date of obligation to conclude the insurance and the deadline for some other obligations stipulated in connection with purchasing or using the motor vehicle.
It will be helpful to outline the most important regulations of the law in effect. We provide you here with a brief and easily understandable summary.
All users of motor vehicles registered in Hungary are obliged to conclude a liability insurance contract and ensure the validity of this contract by means of the regular payment of the premium. The obligation to conclude the contract rests with the actual registered user, from the very moment when the authorities have provided the motor vehicle with a registration number, until the motor vehicle is ultimately taken off the road traffic, except for the period of any suspension of use.
It is permitted by law to use the motor vehicle in Hungary prior to obtaining the traffic license or subsequent to the ultimate withdrawal from the traffic, then the insurance contract (preliminary cover note) must at least cover the period for which the temporary registry permit and registration number are valid. (This would apply to motor vehicles with ‘E’, ‘P’, ‘Z’, ‘CD’ and occasionally to ‘V’ registration numbers.)
It is evident from the above rules that the user of a motor vehicle must be covered by insurance from the very first moment.
Now, at least two questions would arise from the above statement.
Who is the user of a motor vehicle? According our TPL law, this must be either the owner of the motor vehicle or the one who is named as registered user in the document issued by the authorities in the country of location.
In other words: if no user is registered by name in the registration document, the owner of the vehicle is obliged and allowed to conclude the contract. And he/she should be the real owner, who is not necessarily identical with the owner appearing in the registration document.
The situation is slightly different if not only the owner,but a user is also named in the registration document. In this case, only the user is obliged and allowed to conclude the insurance contract and should face the consequences of any negligence in doing so. We must strongly emphasize, when the user is not named in the registration document, all possible consequences of the lack of an insurance contract will fall upon the owner of the motor vehicle, even though he/she has separately entered a conclusive written agreement with the user. This would only facilitate the subsequent shift of his/her financial burden.
The new owner, as user of the vehicle, must have concluded a valid motor liability insurance contract or at least a preliminary cover note from the very moment of acquisition of the ownership. At the very moment of ownership transfer, the insurance contract of the previous owner will expire due to loss of interest. As a consequence of it the insurer shall not be obliged to indemnify for the losses caused by the new owner.
Expiration of the insurance contract due to non-payment of the premium.
The insurance contract would expire in 30 days from the expiration date of payment of the insurance premium, provided that the outstanding premium is not paid, or the insurer has not agreed on a deferred payment, or the insurer has not started legal action to collect the premium. Therefore, it is highly recommended to monitor the bank account in conformity with the agreed instalments, because temporarily insufficient funds or a mistake by the bank or the insurer may result in most unpleasant and very costly consequences. Bearing in mind the obligation of the parties to co-operate, the user of the vehicle will not be exempted from his/her obligation, even if the insurance company is sending the money transfer order forms with a certain delay or these forms are not arriving at all. When the legally allocated 30 day period from the expiration date of payment is over, the contract will automatically expire. Any premium payment effected subsequent to the expiry of the contract will neither make the former contract effective again, nor establish another contract.