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Motor Insurance - Private Individuals

This insurance covers Liability towards third parties (legally required), vehicle damage, protection of the driver and passengers, and breakdown assistance.
If a claim event occurs, you will be grateful for having someone dependable to rely on. As insurance brokers, we have privileged access to companies and will make sure, to the extent possible, that your case is processed with the utmost attention and promptness.

FAQ - Motor Insurance

The owner or driver of a vehicle are liable for any damage caused by it, and in the event of an accident can incur serious liabilities as a result of compensation payments which may be required of them. On the other hand, it is important to safeguard the legitimate interests of those affected by road traffic accidents. To this end, it was made a legal requirement to take out third party liability insurance for land-based motor vehicles and their trailers. Failure to insure is punishable by law, and can result in confiscation of the vehicle, payment of a fine and, in the event of an accident, the driver or owner of the vehicle being held liable for compensation of the affected parties. The compulsory minimum capital for vehicles not used for public transportation is currently 3,250,000€. However, because the damage caused may exceed this amount, many policyholders choose to take out a higher level of insurance.

Compulsory insurance covers compensation due as a result of injury or damage caused to third parties and persons carried, with the exception of the driver of the vehicle. For passengers carried free of charge and persons carried pursuant to a contract (taxi, public transportation, etc.), all injury and damage is covered.

No insurance contract covers every single risk. In addition to compulsory third party liability insurance, and because vehicles are high-value items worth preserving, other types of cover which can be purchased include OWN DAMAGE INSURANCE. This type of insurance contract covers damage suffered by the insured vehicle, in accordance with the types of cover purchased. Generally, own damage insurance covers damage resulting from impact, collision and rollover, as well as theft, robbery, fire, lightning and explosion.

From 01 March 1998, the insured value of vehicles for compensation purposes in the event of total loss must be automatically updated by the insurance company in accordance with a table created for this purpose, which must include as reference information the purchase value and age of the vehicle. Alternatively, the parties may expressly agree to any other insurable amount.

Depending on acceptance by insurance companies, other forms of cover can be purchased, such as:

•    an OPTIONAL CAPITAL AMOUNT for third party liability in excess of the compulsory minimum, increasing the scope of liability covered;

•    BREAKDOWN ASSISTANCE for the vehicle and passengers, ensuring that the policyholder receives, in the event of an accident or breakdown, the necessary assistance for towing of the vehicle, transportation of persons and property, and in some cases the provision of a replacement vehicle until completion of the journey;

•    LEGAL PROTECTION, by means of which the policyholder is guaranteed representation in judicial or extrajudicial proceedings arising from a road traffic accident;

•    cover for CARRIED PERSONS, which guarantees the payment of compensation for personal damages to the occupants of the insured vehicle, regardless of liability for the accident;

•    cover for MALICIOUS ACTS, which guarantees compensation for or repair of damages caused to the insured vehicle by direct and voluntary human action;

•    cover for TEMPORARY LOSS OF USE, which guarantees payment of compensation for damages arising from loss of use of the insured vehicle;

•    cover for NATURAL DISASTERS, which guarantees the repair of damage caused by natural phenomena such as cyclones, earthquakes and others.

The excess is an amount set out in the policy document which is payable by the policyholder in the event of a claim. It can be defined as a fixed amount or as a percentage of the insured amount. The excess makes a lower premium possible, as the policyholder is liable for a part of the damage. The higher the excess, the lower the premium. Excesses can be set both for third party liability cover and for own damage cover. However, the excess is not chargeable to affected third parties, who are compensated for the full amount of damages suffered up to the limit of the cover ensured by the policy.

Yes. However, the law provides a way around this refusal. Anyone unable to obtain acceptance of a contract by at least three insurance companies should demand from each one a “declaration of refusal”, which the companies are legally obliged to provide, and contact the Service and Communication Department of the Portuguese Association of Insurance Brokers and Agents (ISP), which will specify an insurance company which must accept the contract, along with the respective price. For vehicles subject to the Compulsory Periodic Inspection (similar to the MOT in the UK), insurance companies may only enter into or renew insurance contracts if proof of a successful inspection is provided.

1 - Obtain information about the identity of the other parties involved - driver and vehicle - at the scene of the accident, and about insurance held, in particular the name of the insurance company and policy number (since April 1995 it has been compulsory for vehicles to display a disc with information which enables immediate identification of the insurer);

2 - Identify eyewitnesses (very important);

3 - If possible, seek to reach an agreement by completing a “Friendly Accident Declaration”, which must be filled in and signed by both drivers. Submission of this document to the respective insurance companies is essential for the “Direct Compensation of the Insured” system to work. The aim of this system is to speed up the settlement of claims in order to improve service to users, enabling each policyholder to settle the claim directly with their own insurance company. The DCI system applies providing only two vehicles were involved in the accident, no injuries were caused and the material damage arising from the accident does not exceed €15,000. When completing the “Friendly Accident Declaration”, the drivers merely need to describe the circumstances of the accident, and should not admit guilt. If a driver is not liable, the declaration will not result in an increased premium. Each driver should retain a copy to submit to their insurance company.

4 - If a friendly declaration cannot be completed or whenever injuries are caused, the police should be called.

If either driver fails to show documents proving the existence of an insurance contract, the other parties involved should obtain the information listed above, in particular the number plate of the vehicle and identity of the driver, and request information from the Consumer Support Department of the Portuguese Association of Insurance Brokers and Agents (ISP) on how to identify the insurance company from the number plate, or resort to the Motor Guarantee Fund, if no valid insurance is held. It is also advisable for the police to be called.

The Motor Guarantee Fund (Fundo de Garantia Automóvel, FGA) is an independent fund operated by the Portuguese Association of Insurance Brokers and Agents (ISP). It covers the payment of compensation due for injury and/or damages arising from road traffic accidents caused by vehicles for which compulsory insurance valid or effective on the date of the accident is not held. The Fund only covers accidents caused by vehicles registered in Portugal and, in general, countries which do not participate in the Green Card system. For material damage, the Motor Guarantee Fund only applies if the party responsible for the accident is known and the amount of damage is greater than €299.28. Those responsible for the damages for which compensation is paid from the Motor Guarantee Fund must repay those amounts with interest. The Motor Guarantee Fund is also responsible for compensation for death or bodily injury resulting from accidents covered by insurance companies which have filed for bankruptcy.

You should contact the PORTUGUESE GREEN CARD OFFICE, which has offices at the Portuguese Insurers’ Association (Associação Portuguesa de Seguradores, APS) and can be reached on tel.: 21 384 81 01/2 or at the following address: Rua Rodrigo da Fonseca n.º 41 - 1070-157 Lisboa. The Green Card system is an international agreement known as the Multilateral Guarantee Agreement, aimed at facilitating the circulation of road vehicles. In countries which participate in the system, the Green Card is a document proving that compulsory insurance is held.

In the event of an accident, the vehicle may suffer partial damage or be considered a total loss. Total loss occurs when the cost of repairing the vehicle is equal to or greater than its fair market value, or when repair is not technically viable. When this happens, the insurer agrees to pay the policyholder compensation in cash, usually based on the fair market value of the vehicle at the time of the accident.
If the compensation is processed pursuant to an own damage contract, the amount considered for the purpose of compensation, in the event of total loss, will be the actual insured amount.

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