LTAB Reminder: payment for MTPL does not mean that the policy has already entered into force

Latvian Motor Insurers' Bureau (hereinafter – LTAB) has recently been receiving more and more complaints from drivers about the penalties imposed in situations where the vehicle owner has made a payment for the MTPL policy before the trip, but, upon starting to participate in traffic, has not waited for the insurer's confirmation or has not checked the effective date indicated in the policy.

LTAB reminds us that a bank notification of a successful payment does not yet confirm that the OCTA policy has already entered into force at a given moment. “People’s everyday logic is understandable – if money has been transferred from the account, it seems that the purchase has been completed. However, the decisive issue is not whether the payment has been made, but whether the OCTA contract has already entered into force at a given moment. During the period from the moment of purchase to the conclusion of the contract, the insurer must not only verify the fact of payment, send the policy data to the OCTA information system and inform the buyer about the conclusion of the contract. Usually this takes a few minutes, but often these actions can take a little longer,” explains LTAB Head of IT department Agris Daukste.

The Road Traffic Law stipulates that the driver of a vehicle must check before driving whether the vehicle owner has compulsory third-party liability insurance. The owner of a passenger car is subject to a fine of 350 to 650 euros for using a vehicle without a MTPL, but if the violation is recorded by a technical device (photo radar) without stopping the vehicle, the minimum fine is usually applied - 350 euros.

"I would especially like to emphasize that a fine of 350 euros may only be the smallest of the possible financial consequences. If a road traffic accident is caused at a time when the MTPL has not yet entered into force, the losses caused to the victims may initially be covered by the MTPL Guarantee Fund, but the amount paid later may be recovered by recourse from the owner, holder or driver of the uninsured vehicle," emphasizes A. Daukste.

LTAB calls on vehicle owners to follow five simple steps to avoid the unpleasant consequences that may arise from driving a vehicle without a valid MTPL:

1. Don't put off purchasing MTPL until the last minute. It's safer to purchase a new policy in advance, specifying its start date immediately after the expiration date of the existing policy.
2. Do not miss the payment deadline specified in the insurance offer. If this is violated, the MTPL contract will also come into force later than specified in the offer.
3. Before making a payment, check the selected policy start date and time. Pay special attention to the hours and minutes, not just the date.
4. After payment, wait for confirmation from the insurer or insurance intermediary regarding the effective date specified in the policy.

Additionally, check the status of the MTPL. LTAB on the website or mobile app. If the policy does not yet appear to be valid, you should not start the trip and should contact the insurer or intermediary.