News in the Motor Insurance sector: Legislative Decree No. 184/2023

Legislative Decree No. 184/2023 (Decree), published on 23 December 2023, has ushered in a new era for motor insurance regulations in Italy. The Decree amends the Motor Code (Legislative Decree No. 285 of 30 April 1992) and the Insurance Code (Legislative Decree No. 209 of 7 September 2005), aligning them with EU standards through the transposition of Directive (EU) 2021/2118 of the European Parliament and the Council.

Among the notable amendments, the decree introduces the following changes.

 

New definition of “Vehicles”

The Decree significantly intervened in the domain of insurance obligations by establishing that the mere use of a vehicle, irrespective of its location or motion status, imposes insurance obligations. This groundbreaking change extends the insurance obligation to vehicles stationary in private areas.

The new definition of vehicles includes all vehicles propelled solely by mechanical power, circulating on the ground (excluding rails), with a maximum design speed exceeding 25 km/h or a maximum net weight exceeding 25 kg and a maximum design speed exceeding 14 km/h.

Light electric vehicles, including e-bikes and e-scooters, are now expressly covered under mandatory third-party motor liability insurance.

Specific identification criteria for these vehicles will be determined through a decree to be jointly issued by the Minister of Enterprise and Industry, the Minister of Infrastructure and Transport, and the Minister of the Interior by 22 March 2024.

 

Coverage for multiple vehicles

The Decree also provides that, to fulfil the coverage obligation, public or private entities can offer policies covering the risk for multiple vehicles in accordance with established contractual practices. This provision is applicable when these vehicles are used for the entities’ activities and analytically identified in the policy.

This approach streamlines insurance practices, providing flexibility for entities with diverse vehicle usage.

 

Recovery action among guarantee funds

With the new Decree, if the damaging vehicle is insured with a company from other EU states, the Italian Guarantee Fund (Fondo di Garanzia per le Vittime della Strada) acts as the front office. But the ultimate responsibility for the claim remains with the counterpart Fund of the EU Member State where the insurer of the damaging vehicle is based.

The Directive also aims to ensure perfect reciprocity in claims between European Guarantee Funds in the event of bankruptcy or liquidation of a company operating under freedom of establishment or free provision of services regimes.

 

Increased insurance limits

The limits of coverage provided for in Article 128 of the Insurance Code have also been increased, and are now:

• in cases of personal injury, EUR6,450,000, regardless of the number of victims; and
• for property damage, EUR1.3 million per claim, again independent of the number of victims.

These adjustments aim to ensure adequate coverage and compensation in the event of accidents.

The Decree is a landmark reform, modernizing Italy's motor insurance regulations and adapting them to evolving European standards. The expanded definition of "vehicles"  to include light electric vehicles, streamlined collective coverage practices, revised contribution mechanisms, and increased insurance limits collectively enhance the regulatory framework, ensuring a more robust and responsive system for all stakeholders involved.

The Legislative Decree is available here.