The Insurance Guarantee Fund summed up 2024. – Insurers paid out more than 19 billion PLN from third party liability and AC insurance
The Information Centre of the Insurance Guarantee Fund (UFG) summed up the year 2024 in the motor third-party liability and AC insurance market. Insurers paid out a record amount of over 19 billion PLN, including almost 11 billion PLN from compulsory OC. The value of indemnities paid out increased by more than 16% in Third Party Liability Insurance and by 19.6% in AC compared to 2023. The number of active Third Party Liability Insurance policies at the end of 2024 was 29.7 million and AC was 7.7 million, indicating an increased interest in voluntary insurance.
In 2024, the injured reported more than 1.86 million motor insurance claims, 6.5 per cent more than the year before. More than 1 million claims were reported from MTPL, and about 845,000 from AC. The significant increase in the number of claims and the increasing costs of their settlement influenced the higher values of the indemnities paid out. Insurers paid out 9.34 billion PLN from MTPL for damage to property and 1.63 billion PLN for personal injury, while 8.27 billion PLN from AC.
Analysis of UFG data shows that the highest number of Third Party Liability Insurance damages occurred in October, May and January, with Fridays being the most frequent. In the case of AC, most damages were reported in July, May and June, with Mondays proving to be the day with the highest number of incidents.
The increase in the number of claims and their value reflects rising claims handling costs, but also a higher number of active policies. UFG data help identify trends in the motor insurance market and adapt insurers’ actions to the changing situation.
Investigation into a criminal group extorting compensation
The Regional Prosecutor’s Office in Białystok is supervising an investigation into an organised criminal group operating in Mazovia from at least 2021 to 2024. The group was involved in extorting compensation by organising fictitious road collisions and laundering the proceeds.
To carry out the scam, economic entities registered as so-called ‘dummies’ – people in a difficult life situation – were used. These companies were supposed to pretend to be repair shops, issuing invoices for supposed vehicle repairs and rental of replacement cars, although in fact they were not conducting real business. The bank accounts of these companies were used to transfer and legalise funds obtained from extortion.
Also involved were so-called stunt drivers, who, in return for remuneration, participated in arranged collisions and then left the scene to be taken over by other people pretending to be drivers. The same vehicles were used repeatedly for the faked accidents and a fixed group of people were in charge of reporting the damage to insurers.
So far, the losses of insurance companies have been estimated at several million PLN, but this amount may increase, as more cases of fraud are revealed. The investigation is of a developing nature – the collected material already amounts to 235 volumes, and there are 12 suspects in the case.
Communication from the Financial Ombudsman on the resolution of the Supreme Court concerning the determination of compensation
On 11 September 2024, the Supreme Court, sitting in a panel of seven judges, issued a resolution (Case No. III CZP 65/23) concerning the rules for determining compensation in the event of partial damage to a vehicle. The court ruled that if it has become impossible for the injured party to repair the vehicle – in particular as a result of its sale or previous repair – compensation cannot be determined on the basis of hypothetical repair costs.
Having analysed the justification for the resolution, the Financial Ombudsman presents his position, expressing his criticism of the adopted concept of the so-called ‘dynamic nature of the damage’. The resolution continues the line of jurisprudence expressed in the resolution of the Supreme Court of 8 May 2024 (ref. III CZP 142/22) and changes the previous approach, according to which the amount of compensation was determined on the basis of hypothetical repair costs, regardless of the further actions of the injured party.
The Financial Ombudsman points out that:
- The concept of the dynamic nature of the damage may lead to a limitation of the principle of full reparation.
- Injured parties may have to hold off on repairing their vehicle until the conclusion of the legal proceedings, placing an additional burden on them.
- The new approach may make it more difficult to pursue claims and shift the burden of proof to the injured party.
- The resolution may violate the constitutional principle of equal treatment of victims and the right to property.
The Supreme Court has recognised that damage is dynamic in nature and that the amount of damage can change from the moment it is caused until it is repaired. For this reason, the amount of compensation should correspond to the actual repair costs or losses incurred by the injured party and not to hypothetical repair costs. In the justification of the resolution, it was pointed out that:
- If the vehicle is repaired, the damage corresponds to the actual repair costs incurred and any loss in value of the vehicle.
- If the damaged vehicle is sold, the damage should be determined as the difference between the value of the vehicle before the damage and the price obtained from the sale.
- Adopting the costing method would lead to the potential enrichment of the injured party, which is contrary to the principle of damage compensation.
The Financial Ombudsman sees a number of concerns with the resolution. In particular:
- It remains unclear how the injured party is supposed to prove the amount of damage if he has made the repairs himself using used parts.
- It has not been clarified whether the repair invoice will be sufficient proof of the amount of damage and whether it will be binding on insurance companies.
- The resolution does not resolve why the sale of the damaged vehicle before the payment of compensation would amount to seeking unjust enrichment, whereas the sale after receiving compensation is considered an entitlement of the owner.
In addition, the Financial Ombudsman draws attention to the need to comply with the statutory 30-day deadline for the payment of compensation under Article 14 of the Mandatory Insurance Act. Waiting for the victim’s follow-up should not extend this deadline. Otherwise, the injured party remains in a state of uncertainty as to the amount of the benefit to which he or she is entitled, which further complicates the loss adjustment process.
The Supreme Court’s resolution of 11 September 2024 may significantly affect the manner in which compensation under compulsory motor vehicle liability insurance is determined. Although its aim was to unify practice, in reality it may lead to further divergences in case law and complications in the loss adjustment process.
The Financial Ombudsman will monitor further developments and the practice of the common courts in the application of the resolution in question, bearing in mind the interests of the victims and the need to ensure a fair and efficient claims process.
A trap for car owners – a moment’s delay and a hefty fine
The Supreme Administrative Court (NSA), in a judgement of 13 March 2025, upheld the cassation complaint of the Ombudsman (RPO) concerning the summons of the Insurance Guarantee Fund (UFG) to pay a penalty for lack of third-party liability insurance. Administrative courts of first instance have so far refused to consider complaints against UFG decisions, considering that it is not a public administration body. The NSA reversed this position and referred the case for reconsideration.
The RPO stresses that the obligation to have a third-party liability is of a public law nature and that the penalty for its absence constitutes an administrative fine. In his opinion, the provisions of the Code of Administrative Procedure, which provide for the possibility of exemption from liability in the case of force majeure, should apply to it. The current legislation does not provide such a possibility, making it impossible for citizens to avoid the penalty even in justified cases, such as an error by the insurer, a hospital stay or misinformation from the vehicle dealer.
The amount of penalties, which are based on the minimum wage, is also a problem. In 2025, the penalty for not having a third-party liability over 14 days is as high as PLN 9330, and for being one day late – PLN 1870. In the ROP’s view, the lack of flexibility in imposing these fees makes citizens see them as a legal trap from which they cannot escape.
With its decision, the NSA opens the way to a fairer approach to the imposition of penalties for lack of OC. The RPO emphasises the need for changes to take individual circumstances into account and avoid absurd situations where drivers are penalised for unintentional mistakes.
In 2024, Polish companies insured a trade turnover of more than 939 billion PLN
Despite a decrease in companies’ sales revenues (from 5.1 trillion PLN in 2024, i.e. by approximately 3%), the value of insured turnover increased by 4% – to 939 billion PLN. This indicates a growing awareness among businesses of the use of receivables insurance as a tool to support sales and increase credibility with banks.
A survey by SW Research for the Polish Insurance Association shows that 45% of companies regard receivables insurance as an effective financial management tool and 43% cannot imagine doing business without it. At the same time, 36% of companies are concerned about the insolvency of their counterparties.
Despite an increase in the value of insured turnover, gross premiums written fell by 9%, to around 957 million PLN, while the value of claims paid rose by as much as 23%, to over 472 million PLN. This is the result of both a higher number of claims and their higher value – reflecting the difficult market situation, with deteriorating payment discipline and a growing number of insolvencies.
In 2024, the number of company insolvencies increased by 10.7% compared to the previous year, with most proceedings relating to manufacturing, trade and construction. There were also 4 457 restructuring proceedings – 7.4% more than the previous year – whose value increased by 24% (to 407.8 million PLN).
It is worth noting that the scale of insolvencies and claims in export insurance tends to be greater than in the domestic market.
Pedestrian was drunk but driver still liable – Supreme Court ruling
The Supreme Court in a recent judgment (ref. II CSKP 2286/22) confirmed the liability of a driver for hitting a pedestrian, even though the pedestrian was crossing the road in a prohibited place and was intoxicated. The key point was that the driver had failed to take special care, driving at a speed of at least 50 km/h in a place where the 40 km/h limit was in force, and had not adapted his driving to the difficult conditions – night, rain, limited visibility.
The pedestrian stepped onto the roadway from behind parked cars, which is not an unusual occurrence – such situations are common and drivers should take them into account. The Regional Court found that the pedestrian contributed 50% to the accident, reducing his compensation from 450,000 PLN to 225,000 PLN. However, the Court of Appeal reduced this contribution to 30%, pointing to the driver’s objective responsibility and his significant breaches of the law.
The Supreme Court dismissed the insurer’s cassation appeal, emphasising that, according to Article 362 of the Civil Code, the degree of fault and the circumstances of the specific incident are the main determinants of a reduction in compensation. The driver bears an increased responsibility due to the risks posed by driving.
Arrest for attempting to extort 600 thousand PLN compensation
The court, at the request of the Płońsk District Prosecutor’s Office, decided on a three-month remand for a 34-year-old resident of the Płońsk district, suspected of attempting to extort compensation and making false statements.
The man reported the theft of agricultural machinery worth 1.5 million PLN, but an investigation revealed that the equipment was in warehouses he had rented. He heard 13 charges, including attempted fraud and misappropriation of property. He attempted to defraud nearly 600,000 PLN from two insurance companies.
He faces up to 10 years in prison. The investigation is ongoing – the services are looking into whether he acted in a wider scheme.