Obligation to insure unregistered vehicles

According to the Motor Liability Insurance Act, the permanent owner or permanent holder of a vehicle must
take out a motor liability insurance if the vehicle is in traffic use.

Whether the vehicle is registered or not has no effect on the obligation to insure.

Using the vehicle in off-road areas also counts as having the vehicle in traffic use.
Among others, the following areas are considered traffic routes in the Motor Liability Insurance Act:

• roads and areas intended for traffic
• yards of residential buildings
• other areas where motor vehicles can be used, including terrain.

Intended use or use in an isolated area can form an exception

A vehicle’s intended use or use in an area isolated from traffic can, in certain situations, mean that possible accidents will not be compensated under the motor liability insurance. Instead, compensation in these cases is paid from possible additional insurance policies, for example sports insurance.

Such a situation is in question if the conditions below are met.

According to the Motor Liability Insurance Act, a vehicle is in traffic use when it is used in

• an area isolated from traffic for racing or testing purposes, or
• training directly related to a race.

An area is considered isolated

• when the area is fenced or entry to it is otherwise prevented with
  structures or other methods while the vehicle is in use, or
• when traffic and pedestrians are prevented from entering the area by continuous surveillance.

However, the application of this provision requires that the conditions for intended use and use in an isolated area
are met simultaneously. In this case, possible accidents are not compensated from the motor liability insurance.

In practice, motocross tracks, for example, are rarely isolated areas as described in the Motor Liability Insurance Act during training or even races. Similarly, many kart circuits and motorsport venues do not meet the criteria set for an area isolated from traffic in the Motor Liability Insurance Act Pit areas are usually also not isolated areas.

In practice, a vehicle used for racing, testing or training purposes can be without a motor liability insurance only if its use is restricted to isolated areas with surveillance, from which the vehicle is transported out of as cargo.

Driving motocross motorcycles, racing motorcycles and other such vehicles in areas that are not isolated is deemed use in traffic as intended in the Motor Liability Insurance Act, and thus a motor liability insurance policy must be taken out for these vehicles.

Compensation under the motor liability insurance

Compensation for an accident is paid from the motor liability insurance if the accident happened in the circumstances specified in the Motor Liability Insurance Act, i.e. while the vehicle was used in traffic. 

Accident or sports insurance policies can supplement the motor liability insurance policy in accidents not covered by the Motor Liability Insurance Act. Such an accident can happen, for example, during a race that happens in an area that meets the criteria set for the intended use of the vehicle and the area being isolated. In this case, the vehicle is not considered to be used in traffic.

Depending on the nature of the accident and the insurance policy, compensation can be claimed primarily under an accident or sports insurance as well, in addition to claiming compensation for the damages compensable under the motor liability insurance.

Motor liability insurance policies are always vehicle specific. Each insurance company determines
the bases of calculation for of the insurance premiums of the motor liability insurance policies they offer. This means prices between companies may vary.