Motor vehicle insurance can be compulsory and volunatary.
Compulsory motor vehicle insurance
The motor third party liability insurance represents insurance against liability of owners or users of the motor vehicles for the damage caused to third parties or for damage to or destruction of things during a using of the motor vehicle.
In almost all countries, was introduced as a compulsory insurance.
According to provisions of Article 4 of Law on Compulsory Traffic Insurance the owners of means of transport, used for public transport, and the owners of other means of transport (motor vehicles, boats, aircrafts) , shall be required to sign a contract on compulsory insurance before the means of transport is used for transport.
An insurance company shall enter into a contract on compulsory insurance at policy conditions and scales of premiums applicable at the time such insurance contract is made and an insurance company may not refuse an application for compulsory insurance contract if the policyholder accepts the policy conditions and scales of premiums of the insurance company for that type of insurance valid at the time of applying for the insurance contract.
Policy conditions are an integral part of the compulsory insurance contract and the insurance company is obligated to hand them over to the policyholder when closing the contract.
The policy conditions which grant lesser rights to damaged parties than those provided by Law on Compulsory Traffic Insurance shall have no legal effect.
Liability undertaken by an insurer under the compulsory insurance contract shall, if not agreed otherwise, begin from the expiration of the 24th hour of the day indicated on the insurance document as the date of commencement of coverage and shall cease upon the expiration of the 24th hour of the day indicated as the expiry date of coverage.
The owner of a motor vehicle subject to registration requirement shall, at the moment of registration, extending of registration validity or obtaining temporary registration plates, provide evidence of the concluded motor third party liability insurance contract, to the body authorised for vehicle registration.
The owner of a motor vehicle not subject to annual registration shall enter into a contract on motor third party liability insurance at the time he obtains the respective license to use such vehicle, and shall renew the insurance contract during the time the vehicle is being used.
The provisions of the Law on Compulsory Traffic Insurance on compulsory motor vehicle insurance shall not apply to the means of transport of the Serbian Armed Forces.
Voluntary motor vehicle insurance
Comprehensive motor vehicle insurance is a voluntary insurance that is regulated by the insurance contract between the insurer and the insured, because of the will of the insurer and
Comprehensive motor vehicle insurance represents insurance of means of transport, its hull, machinery, equipment and accessories from damage, destruction or disappearance. With comprehensive motor vehicle insurance are covered the damages to own vehicle, in contract of the motor third party liability insurance.
Vehicles for which it can be concluded comprehensive motor vehicle insurance, excluding special forms of insurance, are classified into the following groups of premiums: passenger cars, freight vehicles, buses, tractors, special motor vehicles, trailers, motor vehicles with foreign registration plates, vehicles for repair, commercial vehicles and rail vehicles. In so doing specific modalities of the comprehensive motor vehicle insurance shall be prescribed depending on the insurance company, for some types of motor vehicles, previously mentioned.
Volume of comprehensive motor vehicle insurance
Insurance companies generally offer three volume of coverage of the comprehensive motor vehicle insurance: fully comprehensive motor vehicle insurance, supplementary comprehensive motor vehicle insurance and partial comprehensive motor vehicle insurance.
Fully comprehensive motor vehicle insurace offers protection against the following risks:
- traffic accidents
- explosion (except nuclear explosion)
- sudden thermal or chemical external action
- fall or stroke of the object which is not part of the subject of insurance
- the fall of aircraft
- manifestation or demonstration
- prank or malicious actions of third parties
- damage to upholstery in the insured vehicle while providing assistance to persons injured in traffic accidents or otherwise
- intentionally caused damage to insured things in order to prevent greater damage, as well as the measures taken to reduce or eliminate the harm
- avalanches as well as falling snow and ice to the vehicle
- landslide or collapsing of soil and rock
- flood, torrent and high water
- sinking vehicle (may be contracted by a special clause)
- theft of vehicles under which are considered: burglary, armed robbery and bnaditry of the whole vehicle or parts thereof
- frauds (in the case of vehicles taken on lease or leased by the rent-a-car companies)
- peculation (can be contracted by a special clause).
Supplementary comprehensive motor vehicle insurace is contracted with fully comprehensive motor vehicle insurace and includes:
- special equipment of vehicles
- tools and equipment
- advertising and other labels on vehicle
- the cost of towing
- the cost of renting a replaceable ehicle.
Partial comprehensive motor vehicle insurance shall be contracted within comprehensive motor vehicle insurance policy. Insurance protection is ensured by conclusion of the partial comprehensive insurance for:
- all glasses standard installed on the vehicle (front, rear and side), except for protecting of the glass or plastic on the light devices, mirrors or on roof of the vehicle (including a glass roof).
Period of comprehensive motor vehicle insurance
Comprehensive motor vehicle insurance can be arranged with the following expiry dates:
- short-term (one year or less)
- perennial with a certain duration (the deadline should be longer than a year)
- perennial with indefinite duration (the deadline can not be shorter than one year).