​RCA victims will no longer be able to receive a maximum of €400 up front from insurers for self-repairs of damaged cars, under an amendment to the RCA law passed in the Senate on Monday. “We are interested in having the damage repaired in authorized services, not by block, and the second aspect is that the amounts paid by insurers for repairs are taxable,” said PSD Senator Daniel Zamfir, the initiator of this change.

The plenary session of the Senate, as reported by the first chamber, should adopt on Monday new amendments to the law on RCA, aimed at reducing prices for mandatory auto insurance.

One of the amendments adopted on Monday in the committees gathered in the Senate, and which will be approved in the plenary session, concerns changes regarding the advance payment of compensation for independent repairs.

• Own car repair refers to the fact that the injured party demands compensation on the basis of an assessment made by the insurer before the repair of the vehicle, after which he himself, at his own expense, takes care of bringing it to the condition before the occurrence of the insured risk.

Insurers will no longer be able to pay a maximum of 400 euros in advance. Otherwise, a fine of up to 1% of the turnover

The amendment, initiated by the PSD and agreed with the Financial Supervisory Authority (ASF), prohibits an advance payment for repairs above 400 EUR/2000 lei.

• “You have a broken mirror, a scratched wing, you can repair it yourself if the repair cost is within this amount.
• If the damage exceeds 400 EUR/2,000 lei, you go to an authorized service center that guarantees repairs,” said Daniel Zamfir, the PSD senator who proposed the amendment.

The amendment also provides for sanctions – accordingly, a fine of up to 1% of the total turnover for the financial year preceding the sanctions.

The amendment provides that in Article 23, after clause (6), three new paragraphs are added, par. (7), (8) and (9) as follows:

(7) At the request of the injured person, compensation may be paid before the repair of the damaged property, provided that the total amount of compensation does not exceed the equivalent of 400 euros in lei at the BNR exchange rate on the day of payment.

(8) The exception provided for in para. (7) does not apply in the following situations:

a) the vehicle was included in a situation of complete economic loss;

b) the vehicle was disposed of damaged;

c) the vehicle is removed from circulation.

(9) Violation of the provisions of par. (7) is a violation and is punishable by a fine of 1% of the total turnover for the financial year preceding the sanction.

What motivated this change?

• “In hundreds of thousands of claims per year, insurance companies pay compensation late or unjustifiably reduce its amount and close the claims reserve for the amount of reduced amounts.
• Many victims are effectively unable to receive adequate compensation due to this practice, which is already in use in the market and could lead to a repeat of situations like Euroins and City Insurance.
• In this sense, the introduction of a threshold set at the equivalent of 400 euros in lei (minimum net salary) will allow to eliminate situations in which direct compensation for serious damages is allowed,” the justification for this amendment states.

Insurers: “Romanians violated the law” / Transporters: The truck’s headlight exceeds 1,000 euros

Representatives of insurers and carriers present at the vote of the specialized committees in the Senate did not agree with this amendment.

• “We repeat that we do not agree, because, firstly, Romanians are being deprived of a fundamental right. The second aspect is related to the ceiling of 400 euros.
• The difference between a Logan bar, which can be as much as 400 euros, and a Mercedes bar, which costs 5 times more, has nothing to do with what you want here.
• Prices take into account the type of vehicle and how new it is,” said Medellin Rosu, president of the Bureau of Auto Insurers (BAAR).

Insurers have previously complained that such regulation would infringe on injured parties’ constitutionally protected property rights in the vehicles they own, limiting their ability to receive monetary compensation for damages to those vehicles, and that they would begin by falsely assuming that today all those who want to benefit from prepayment repair their cars in unauthorized workshops.

• “The violation of property rights is manifested in the fact that the right of the owner of a damaged vehicle to decide its fate is limited, especially since in real life there are various cases when the victims of road accidents decide not to initiate the repair of the damaged car for personal reasons.
• Let’s not forget that there are urgent situations when the affected parties need immediate financial compensation to cover various situations and expenses. These needs highlight the importance of flexibility and access to appropriate compensation to meet a wide range of personal needs and circumstances, going beyond simple car repairs.
• In short, if the new legislative proposals become law, some of the victims of RCA will have to make it mandatory to prove that they repaired their car, without being entitled to receive monetary compensation otherwise,” they previously complained to insurers.

Even the carriers did not agree with this change approved by the senators.

• “We understand the reason for exposing the activities of the services, but we believe that this ceiling of 400 euros is too low. You specifically mean cars.
• On tractors, a headlight easily costs 1,000 euros, and if my headlight breaks, it’s one thing to order it and put it in the garage myself, and another – to go to the service center and sit with the truck for 2-3 days. I’m stuck and I can’t do my job,” said Isaac Constantine, president of the National Union of Truckers (UNTRR).

The bill amending Law No. 132/2017 on compulsory car liability insurance, which will be adopted on Monday in the Senate plenary, also covers other major changes to the RCA, such as the revision of the bonus-malus system, the possibility of contract suspension RCA, as well as payment of the insurance premium in installments.

After the Senate, the bill is sent to the Chamber of Deputies, which is the decision-making body.