Owner's civil liability for the motor vehicle used in road traffic shall be insured by each owner or holder of a motor vehicle by entering into the CTPL insurance contract or policy.
Standard CTPL contract is valid in the territory of the European Economic Area, Swiss Confederation (CH) and other countries that have joined the multilateral agreement of 30 May 2002, namely, Croatia, Andorra, Serbia.
CTPL is governed by the Republic of Latvia law On Compulsory Civil Liability Insurance of Owners of Motor Vehicles.
CTPL insurance indemnifies the following loss:
1. Loss caused to the belongings or property of a third person in a road traffic accident.
- Expenses for the repairs of the motor vehicle or other damaged property.
- Loss due to total loss of motor vehicle, if the repairs of such vehicle are technically impossible or economically unsound.
- Expenses due to the removal of a motor vehicle or the wreck thereof (if the car is not in working order) from the scene of a road traffic accident to the place of residence of such vehicle owner or legal user who was driving the motor vehicle at the time of the road traffic accident, or to a place of the vehicle repairs within the territory of the Republic of Latvia.
- Loss due to damage to environment.
2. Loss caused to a person
2.1. Loss due to medical treatment of injured person:
- Transportation, admission, maintenance, diagnostics, treatment and rehabilitation of the injured person in a medical treatment or medical rehabilitation institution.
- Nursing of an injured person.
- Purchase of medication, therapeutic sustenance.
- Treatment at home (including travel expenses when visiting medical treatment or medical rehabilitation institutions).
- Prosthetics, endoprosthetics and the purchase or rental of technical aids.
2.2. Loss due to temporary incapacity for employment
- Insurance compensates the non-received income for the period of incapacity for employment certified by the medical treatment institution.
- Non-received income of an injured person who at the moment of the road traffic accident was an employee or a self-employed person.
2.3. Loss due to loss of ability to work
- Pension shall be calculated according to the following formula: average earnings of an injured person - received income from work after the road traffic accident - pension granted from the State social insurance budget - benefits received from the State and local government budget.
2.4. Loss due to death
- Loss caused to dependant persons due to death of injured person shall be calculated according to the following formula: income not received by the perished person, to whom each dependant was entitled to while an injured person was alive - (minus) the amount of survivor’s pension allocated to a dependant.
- Funeral expenses shall be compensated in an amount that is not less than eight average minimum monthly wages.
- If the sum of the actual funeral expenses is greater, the actual reasonable expenses certified by documentation will be compensated.
- An insurance indemnity for loss due to the death of an injured person can be paid also if the death of an injured person has set in within a period of one year after a road traffic accident and that the death is causally related to the relevant accident.
2.5. Non-material loss caused to a person in a road accident shall be loss that involve:
- A physical trauma of an injured person.
- The crippling or disablement of an injured person.
- The death of a breadwinner, dependant or a spouse.
- Group I disability of a breadwinner, dependant or a spouse.