New act governing motor liability insurance enters into force

Bulletin 30 December 2016

The old act governing motor liability insurance is being abolished in its entirety; it will be replaced with a new law from 1 January 2017 onwards. The aim of the complete reform to make the legislation governing motor liability insurance clearer and less ambiguous than before.

The change does not require any action from consumers. However, it is worth noting that failing to insure your vehicle will bring stiffer penalties in future. It is forbidden to drive an uninsured vehicle, and if such a vehicle is identified in traffic, the police have the power to remove its registration plates.

Also, the penalty premiums for not having insurance will be raised. The size of the penalty fee will be affected by the period of time the vehicle has been uninsured, whether the failure to insure has been deliberate and repeated, as well as whether the vehicle has been driven in traffic. In future, the State Treasury will determine the payments for failing to take out motor liability insurance. On the other hand, the Finnish Motor Insurers' Centre will continue to administer the collection of payments.

The new law does not bring any radical changes to the obligation to insure. For consumers, the most significant change is that it is no longer necessary to take out motor liability insurance for vehicles that have been withdrawn from use. In such cases, the insurance must be cancelled separately. If the motor liability insurance has been cancelled, it has to be taken out again before informing Trafi that the vehicle is back on the road. It is, of course, forbidden to drive a car that has been withdrawn from use.

From the beginning of the year, compensation for accidents caused by vehicles exempted from motor liability insurance will move from the State Treasury to the Finnish Motor Insurers' Centre. The State Treasury remains responsible for accidents caused by vehicles owned by the Finnish State.

Flexibility in insurance pricing

As before, the law obligates insurance companies to take a person's claims history into account in insurance premiums. However, the new law does give insurance companies more flexibility in taking a customer's insurance and claims history into account.

For example, the claims history of one vehicle can be taken into account in the pricing of more than one vehicle, and the claims histories of a number of vehicles can be taken into account in the pricing of one vehicle's insurance with the same owner. This means that the claims history does not necessarily have to start at zero with each new vehicle.

Additional information:

  • Janne Jumppanen, Director, tel. +358 40 450 4543
  • Antti Tuulensuu, Compensation Manager, tel. +358 40 450 4671
  • Visa Kronbäck, Chief of Legal Affairs, tel. + 358 40 450 4259
  • Communication, tel. +358 40 450 4700


The Finnish Motor Insurers' Centre (LVK) is the party that ultimately safeguards the rights of a person who has been involved in a road accident and takes care of the consequences of the statutory motor liability insurance. LVK promotes traffic safety by coordinating the work of road accident investigation committees and compiling statistics regarding accidents. LVK has extensive international duties, and its members include all insurance companies that grant motor insurance policies in Finland.