Will drivers face an increase in third-party liability insurance premiums? | In Principle

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Will drivers face an increase in third-party liability insurance premiums?

As of 17 June 2022, insurance companies in Poland have been given effective tools for assessing insurance risks in the form of access to information on fines and penalty points. Analysis of this additional data may prompt insurers to raise premiums for some drivers.

For drivers, this change poses a substantial risk for their insurance policies. On one hand, it affects the scope of insurance (in the form of exclusions or extensions). On the other hand, it could impact the amount of the insurance premium and the sum insured, or the issue of possible sublimits.

Assessment of this risk is provided for in the Insurance and Reinsurance Act of 11 September 2015, as the very business of insurance is understood as offering coverage for the risk of the consequences of random events. Within this area, insurance activity also includes assessment of risks in personal insurance and property insurance. The measurement of risk is understood as a mathematical function assigning a monetary amount to a given projection of a probability distribution, and increases along with the level of risk exposure constituting the basis for the projection.

Under this view of the concept of risk, it should be stressed that this is also an important element of motor insurance, including compulsory motor vehicle liability insurance and comprehensive coverage (autocasco or AC), which places a special emphasis on the “loss ratio” of a given driver. This loss ratio is influenced by all sorts of elements, from the policyholder’s age and experience as a driver to, for example, whether the driver has been involved in traffic accidents.

The amendment adds to these elements the ability to view the history of fines and penalty points imposed on the driver.

Amendments to the Road Traffic Law and a new tool for insurers assessing risk

Under the Act of 2 December 2021 Amending the Road Traffic Law and Certain Other Acts, insurance companies have gained instruments allowing for expanded assessment of insurance risk, which will undoubtedly affect the amount of premiums in AC and third-party liability insurance contracts for motor vehicle owners.

Currently, the Road Traffic Law of 20 June 1997 regulates the scope of information that can be provided to entities in connection with fulfilment of their statutory objectives. These entities include insurance companies, which are obliged by law to enter into motor vehicle liability insurance contracts with motor vehicle owners.

This amendment to the Road Traffic Law has significantly expanded the scope of information that insurance companies can obtain from the Central Drivers Register for the purpose of concluding an insurance contract. The catalogue of data collected in the records has also expanded.

Pursuant to Art. 15 of the amending act, through the IT system serving the Insurance Guarantee Fund, insurance companies gained the right to view drivers’ history of violations of traffic law (i.e., to view data related to the history of fines and penalty points imposed on drivers).

As of 17 June 2022, before deciding to enter into an insurance contract with a particular driver, any insurance company offering AC or third-party liability insurance for land vehicles can obtain the following information:

  • Number of points assigned for traffic violations, based on a legally final ruling
  • Number of points that will be finally assigned if the violation is confirmed by a legally final ruling
  • Identification of the traffic violation: legal classification, type of act, date, time and place of commission, number of points assigned for violations based on a legally final ruling, number of points eventually to be assigned if the violation is confirmed by a legally final ruling
  • The entity registering the violation
  • Details of the vehicle through which the violation was committed (type, make, model, registration number) and, in the case of vehicles registered abroad, the country of registration
  • Type of legally final ruling.

Thanks to the amendment, insurance companies have gained an instrument allowing them to estimate insurance risk more accurately, based on the history of the particular driver collected in the Central Driver Register.

Importantly, the history of traffic violations collected in the Central Driver Register is, as a rule, indelible. Exceptions include:

  • Information on penalty points received by the driver (kept for an average of two years)
  • Information on traffic violations (removed five years after occurrence of certain events).

The detailed events and dates for collection of this data in the Central Driver Register are set forth in Art. 98 of the Vehicle Drivers Act of 5 January 2011.

The amendment also modified the scope of data processing, as referred to in Art. 10 of the EU’s General Data Protection Regulation. With the introduction Art. 41(11) of the Insurance and Reinsurance Act, insurance companies have gained the authority to process data on offences or crimes that constitute traffic violations and the points assigned to them.

It is important to note that, pursuant to Art. 41(1d) of the Insurance and Reinsurance Act, insurance companies to which the aforementioned data have been made available are obliged to delete them immediately after the data have been used for assessment of insurance risk and determination of premiums, aimed at concluding an insurance contract.


In principle, these changes should be considered sound. They do raise some doubts with regard to the scope of data processing, however. In particular, the amended provisions of the Insurance and Reinsurance Act expand the scope of data processing, but the time limits for storing information, in particular on traffic violations in the Central Driver Register (data made available to insurers from 17 June 2022), and when they must be deleted, are governed by separate laws.

Here, the question arises whether insurers will assess insurance risks based on current data or on data they have already taken into account, having had access to the history of the particular driver (indeed, this is the basis for assessing the risk) before entering into another insurance contract. While the insurer is obliged to delete the data immediately after use for assessing insurance risk and setting premiums, reuse of these data from a previous contract is not excluded.

In turn, the amendment itself reinforces the belief that we are facing increases in insurance premiums due to greater “tariffication.” It seems that this increase may be influenced in particular by inflation, an increase in the price of spare parts (with a simultaneous reduction of their availability), increased demand for passenger cars, and rising operating costs. Also relevant are the new recommendations on the settlement of motor insurance claims by the Polish Financial Supervisory Authority (for example, the liability of an insurance company under a contract of third-party motor vehicle liability insurance should include reimbursement of reasonable expenses for preparation of an expert opinion at the request of an authorised party by a third party, if preparation of such an expert opinion is necessary to enforce the claim). Preliminary estimates indicate that these recommendations will cause an increase in annual claim handling costs, across the entire market, of about PLN 500 million.

Therefore, it is worth keeping a vigilant eye on the motor insurance market.

Mateusz Kosiorowski, adwokat, Filip Marcinkowski, Insurance practice, Wardyński & Partners