Motor third party liability insurance is required for every motor vehicle running on public roads in Hungary. This type of insurance is called KGFB in Hungarian, and you can switch providers once a year: in November.
If you have a car registered in Hungary, you must be familiar with the concept of KGFB. It is short for “kötelező gépjármű-felelősségbiztosítás”, which is a mandatory liability insurance for motor vehicles. It is the Hungarian equivalent of MTPL, which is a motor third-party liability insurance. This insurance makes sure that if there is an accident and you or your car cause damage to a third party, the health and property related costs will be covered.
Please note: KGFB covers only third-party costs related to accidents you cause. If you want insurance for damages to your own car (not related to accidents that would be covered by the KGFB insurance of the other party), you will need a separate insurance. That type of insurance is called CASCO.
To be allowed on the road, every motor vehicle in Hungary needs an MTPL insurance. If you are buying a car, you must take care of the KGFB by the time you first want to drive it as your own (if you buy from a dealership, ask the dealer about the procedure). If you are selling your car, send a copy of the contract to your insurance provider so they can cancel the insurance and refund you part of your yearly insurance.
Motor vehicles that must have a KGFB insurance in Hungary include:
Electric scooters and motorized bicycles do not require an insurance for now (in 2023).
When police pulls you over, they will want to check on if you are allowed to drive your car, and if the car is allowed on the road. For this purpose, they will check your licence as well as the vehicle’s registration and insurance. If you have a Hungarian driver’s licence and you are driving a car registered in Hungary, they can pull the relevant data from a database, so you only need to present a valid ID document. Otherwise you are required to present all documents to the officer.
The insurance plan of the car must be managed by the operator of the car, which in most cases is the same person as the owner, as indicated in the vehicle registration document. A KGFB insurance plan is always valid for a calendar year, from 1 January through 31 December. If you buy a car in the middle of the year, the insurance will be valid until the end of the year.
Switching insurance providers is possible no sooner than 60 days and no later than 30 days before the first day of the new term. Since the new term starts on 1 January, this practically means that vehicle operators should take care of KGFB for the next year in November. You may decide to stay with your current provider or switch to a new one. This is done easiest online, through the website of individual providers, or through one of the several brokers that can help you compare the offers.
Calculations for how much the yearly mandatory insurance will cost you depend on the data of the vehicle, such as age, engine size, and the like. Another important factor is the bonus / malus class of the operator of the vehicle. Bonus / malus is a system for checking how many accidents were caused by the operator; insurance will cost more to drivers who cause more accidents.
Prices will vary by insurance provider, and various add-ons are available. However, the basic service is the same, as it is defined by law. Damages are compensated up to EUR 1.22 million for property, and EUR 6.07 million for personal injury. The insurance is valid in EEA member states, in Switzerland, and in other members of the Green Card System. Before making a trip abroad, it is worth checking with your insurance provider whether your plan is valid in the countries you plan to cross.
Our team at Helpers Hungary provides administrative assistance to foreigners living, working, and doing business in Hungary. While we focus on business setup and residency applications for the employees as well as the managers, we do our best to make life easier for everyone moving to Hungary. If you want to learn more about things to watch out for while driving in Hungary, click here.
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