Car accidents and insurance payouts: why victims often end up “in the red”

For most drivers, a road traffic accident means not only stress and a damaged car, but also a long road to restoring justice. Many expect that the at‑fault driver’s compulsory liability insurance will cover all losses, yet in practice this is far from guaranteed: because of liability limits, formal denials, delays in payment and undervaluation of damage, victims often have to either accept being “in the red” or go to court.

Legal framework: what the right to compensation is based on
Article 1166 of the Civil Code of Ukraine sets a general rule: property damage caused by unlawful actions must be compensated in full by the person who caused it, so the law proceeds from the presumption of full compensation rather than a “voluntary” partial payment. For traffic accidents, a special regime under Article 1187 applies: a vehicle is treated as a source of increased danger, and its owner or lawful possessor is liable regardless of fault unless they prove exceptional circumstances. In parallel, the system of compulsory third‑party liability insurance (CTPLI/OSCPV) operates: the policy guarantees a minimum level of protection for the victim and explains why they usually apply first to the insurer, but it does not cancel the tort liability of the at‑fault driver.

The insurance company as primary payer and its limits
When the driver’s liability is insured, the insurance company acts as the primary payer, but only within the statutory and contractual limits, which define the ceiling of its liability rather than the actual amount of damage. If the losses exceed this limit, the excess must be compensated by the at‑fault driver: under Article 1194 of the Civil Code they are obliged to pay the difference, so a CTPLI policy does not relieve the driver of liability and only partially covers it. Nevertheless, many people mistakenly believe that “once there is insurance, the issue is closed”, which leads to conflicts when the insurer covers only part of the loss and the at‑fault driver refuses to pay the remainder.

Typical issues with insurance payouts
The most common problem is the discrepancy between the victim’s actual losses and the amount the insurer is willing to pay. This may result from an understated repair estimate, ignoring the loss of the vehicle’s market value, refusal to cover certain expenses (tow truck, storage, medical services, rehabilitation), or formal denials based on missed notification deadlines or documentation flaws. Policy limits often fail to cover real costs, especially in cases of extensive damage to expensive cars or serious bodily injuries, and inflation together with rising repair prices only widens the gap. Another major issue is refusals justified by alleged breaches of policy terms (late accident notification, suspected intoxication, missing documents), where decisions are often purely formal and rely on the assumption that the victim will not challenge them in court.

When to claim directly from the at‑fault driver
Even when the insurer has paid compensation, this does not necessarily mean that all losses are covered. If the payout does not match actual expenses, the victim has the right to claim the difference directly from the at‑fault driver. Direct claims are also necessary when there is no valid CTPLI policy, the insurer has been liquidated or excluded from the Motor (Transport) Insurance Bureau of Ukraine, the payment has been refused or drastically reduced, or when the victim seeks moral (non‑pecuniary) damages, lost profit or additional expenses that are not covered by insurance. In such circumstances, the most effective strategy is to act in parallel against both the insurer and the at‑fault driver, which not only increases the chances of full recovery but also strengthens the victim’s bargaining position, since the prospect of litigation often incentivises settlement.

Pre‑trial settlement as a key stage
From the standpoint of procedural economy and common sense, it is advisable to start with pre‑trial settlement. A written claim to the insurance company setting out the circumstances of the accident, citing the applicable law and attaching evidence of the amount of loss is a basic step that is frequently overlooked. It is also reasonable to send a written demand to the at‑fault driver asking them to voluntarily pay the difference between the actual damage and the insurance payout. Negotiations involving a lawyer are often productive: a specialist can build a strong legal position and clearly explain to the insurer or the at‑fault driver the potential consequences of refusing a settlement, including legal costs, penalties, inflation adjustments and reputational risks. For the victim, the pre‑trial phase is valuable because all sent claims, delivery notices and insurer’s responses later become evidence in court and demonstrate their good faith.

Litigation: what must be proven
If settlement efforts fail, the next step is a lawsuit in which not only the fact of the accident and fault matters, but above all the quality of evidence on the amount of damage. The claimant should have the accident case file, valuation reports on repair costs and loss of commercial value, documents for additional expenses, proof of insurance payments and a calculation of the difference to be recovered, and for moral damage — medical records, psychological reports and witness statements showing deterioration in quality of life. Courts are sceptical of figures based solely on the victim’s assertions; without proper documentation, especially with respect to lost profit (for example, income lost because a vehicle used for business was out of service), a substantial portion of the claim may be rejected.

Why insurance disputes are hard to handle without a lawyer
Formally, the law gives the victim all necessary tools: they can approach the insurer and the Motor Insurance Bureau, bring claims against the at‑fault driver, file lawsuits and request expert examinations. In practice, however, each step is loaded with procedural nuances: strict time limits for notifying the insurer (often up to three working days), documentation requirements, rules on identifying the proper defendant, and methods for calculating damage and court fees. A mistake at any stage can be very costly, ranging from a formal refusal to pay to years of litigation with uncertain outcomes. Insurers usually have in‑house legal teams dedicated to protecting their interests, whereas an unrepresented victim starts from a weaker position. This is why hiring a lawyer specialising in insurance and traffic‑accident disputes is often essential to obtaining full, rather than merely symbolic, compensation.

If you have questions or difficulties related to recovering damages from an at‑fault driver, challenging an insurer’s refusal, preparing a lawsuit or calculating material and non‑pecuniary damage, you should consult a specialised lawyer who will analyse your situation, propose an optimal strategy and support your case at every stage — from pre‑trial negotiations to enforcement of the court judgment.
Author: Maksym Lykhovyd, attorney at WINNER Law Firm.