About the law

Federal Law No. 40-FZ of 25 April 2002 "On Compulsory Insurance of Civil Liability of Vehicle Owners" is the main legal act on OSAGO (compulsory motor third-party liability insurance). It defines who must insure their liability, the limits within which the insurer compensates harm, and how claims are settled. The details — tariffs, rules, the unified methodology for calculating damage — are set by the Bank of Russia in its regulations.

Below are the main provisions of the law in practical terms. This overview does not replace the text of the law: in a dispute, rely on the current version.

Who must insure their liability

Vehicle owners are required to insure the risk of their civil liability (Article 4). The obligation does not apply, in particular, to slow-moving vehicles with a maximum design speed of no more than 20 km/h. Driving without an OSAGO policy is punishable by a fine under the Code of Administrative Offences.

The contract is generally concluded for one year. You can name a limited list of drivers or choose an unrestricted policy. Insurers must make it possible to buy an electronic policy (e-OSAGO) on their website.

Payout limits

The OSAGO sum insured (Article 7):

  • RUB 500,000 — for harm to the life or health of each victim;
  • RUB 400,000 — for damage to the property of each victim.

If the loss exceeds the limit, the victim may recover the difference from the at-fault driver. A voluntary extension of cover — DSAGO — protects you against such claims.

Tariffs

The price of a policy is determined by insurance tariffs set by the Bank of Russia (Directive No. 7204-U as amended by Directive No. 7349-U). The premium is calculated by the formula: base rate × coefficients for region, bonus-malus, age and experience, restriction on the number of drivers, engine power, seasonal use and others. The insurer chooses the base rate within a range set by the regulator. You can calculate the cost in the OSAGO calculator.

Reporting an accident without the police — the European accident report

Article 11.1 allows an accident to be documented without the traffic police if all of the following apply:

  • two vehicles were involved and only they were damaged;
  • both owners have valid OSAGO policies;
  • no one was injured.

The payout limit under the European accident report (evroprotokol) is RUB 100,000. If the accident data are submitted via the Gosuslugi Avto app or the DTP.Evroprotokol app, the limit is RUB 400,000.

Where to claim and deadlines

If only vehicles were damaged and both parties have OSAGO, the victim claims from their own insurer — this is direct loss settlement (Article 14.1). In other cases, the claim goes to the at-fault driver's insurer.

The insurer reviews the claim and either issues a referral for repair or makes a payment within 20 calendar days (excluding non-working public holidays) of receiving the full set of documents. For delays, the law provides for a penalty of 1% of the compensation amount for each day.

Repair or cash

For passenger cars owned by individuals and registered in Russia, the main form of compensation is repair at a service station on the insurer's referral (paragraph 15.1 of Article 12). Repairs are paid without deduction for wear of parts. Cash compensation is paid in cases listed in the law: for example, on total loss of the vehicle, by agreement with the victim, or if no service station meets the requirements.

The amount of damage is determined using the Bank of Russia unified methodology (Regulation No. 755-P) and reference books of average prices for parts and labour hours. In a cash payment, wear is taken into account, but at no more than 50%.

Recourse against the at-fault driver

Having paid the victim, the insurer may recover the amount from the at-fault driver (Article 14) if, in particular, the driver:

  • caused the harm intentionally;
  • was driving under the influence or refused a medical examination;
  • had no right to drive that vehicle;
  • left the scene of the accident;
  • was not named in a policy with a limited list of drivers;
  • caused the accident outside the period of use stated in the contract.

Pre-trial procedure and disputes

Before going to court, the victim sends a written claim to the insurer (Article 16.1) and then, if the dispute is not resolved, applies to the financial ombudsman under Federal Law No. 123-FZ. For OSAGO disputes this step is mandatory regardless of the amount. If a court grants an individual's claims that the insurer did not satisfy voluntarily, the insurer must pay a fine of 50% of the amount awarded.

RSA compensation payments

If the insurer cannot pay, the victim receives a compensation payment from the Russian Union of Motor Insurers (Article 18). This is possible, for example, if the insurer's licence is revoked or it goes bankrupt, and for harm to life and health also if the at-fault driver is unknown or has no OSAGO policy.

Practical takeaways

  • Make sure the policy is valid and you are named in it — otherwise recourse is possible.
  • Use the European accident report via Gosuslugi Avto to get the RUB 400,000 limit.
  • Keep track of deadlines and keep copies of all documents.
  • In a dispute: written claim, then the financial ombudsman, then court.

More about the policy in the OSAGO section; other laws are in the Laws section.