Austrian Mandatory Vehicle Liability Insurance (Motor Vehicle Liability Insurance) and the Bonus-Malus System

In Austria, all vehicles participating in traffic must have mandatory liability insurance that covers the damages caused.

In accordance with Austrian legal regulations, every vehicle owner must ensure the presence of liability insurance. This insurance primarily covers damages caused to third parties while driving a vehicle, whether material or personal injury. Since every perpetrator is liable with their entire assets for damages, the existence of insurance is of paramount importance.

Minimum Coverage Amount

• According to Austrian law, Kfz-Haftpflichtversicherung must cover damages at least 7.6 million euros, with insurance companies potentially offering higher amounts.

The minimum coverage amount ensures that adequate compensation is available even in the case of more serious accidents. Some insurers may offer higher amounts, which can provide additional security for larger claims, such as a mass accident on the highway, or lifelong disability, when the injured party can sue for significant compensation.

Geographical Scope

• The motor vehicle liability insurance covers the entire European region.
• Within the EU, the license plate proves the insurance.
• For travel outside the EU, a green card must be requested.

The Austrian mandatory liability insurance is valid throughout the entire European territory, thus providing comprehensive protection for travelers. Within the European Union, the license plate is sufficient as proof, but outside the EU, it is important to request a green card from the insurance company, which verifies the existence of insurance coverage.

The Term of Motor Vehicle Liability Insurance

• The motor vehicle liability insurance term is one year, and can be terminated on the anniversary date with prior written notice.
• In case of loss of interest (e.g., selling a car), there is no 1-year obligation.

The contract term is typically one year, which automatically extends if not terminated in time. A prior written notice with at least one month’s notice is required. In the event of selling the car or other loss of interest, the contract automatically terminates.

Insurance Protection and Obligations

No insurance, no road registration – a vehicle insurance certificate is required to participate in traffic: Vehicle registration can only take place if the customer has an insurance certificate. The certificate is issued after the insurance contract is concluded.

Payment of Fees: The first fee must be paid within 2 weeks of receiving the insurance policy. Timely payment of the insurance fee is essential for maintaining insurance coverage. If the fee is not paid, the insurance company will notify the authorities, and the license plate may be revoked.

Driving under the influence of alcohol or drugs: In such cases, the insurance company will cover the damage but will recover the amount from the client. If someone drives under the influence of alcohol or drugs, the insurance company will pay the damages to the injured parties, but will recover the paid amount from the driver who violated the regulations.

Austria Bonus-Malus System

The Bonus-Malus system aims to achieve a fairer distribution of insurance premiums. The best-rated insureds with a 0 classification pay significantly discounted premiums, while those at the worst level of 17 must pay a higher amount.

New entrants or those who have not owned a car for at least 1 year typically start their bonus classification at level 9. Insured individuals automatically receive an improvement in their classification after each claim-free year, moving up one level to a more favorable tier, which results in a lower insurance premium.

In the event of a claim, the insured moves to a bonus level 3 levels less favorable, unless the damage paid by the insured is reimbursed within six weeks.

The bonus value is not lost in the event of vehicle exchange or insurance provider change, as it can be transferred to the current bonus level. Furthermore, there is an option to transfer it to a close relative, such as a child. In such cases, the transferor returns to the base, level 9, while the beneficiary receives the transferor’s previous bonus level.