Car Accident in Malta: Who Pays and How to Claim

If the driver who hits your car in Malta turns out to be uninsured, or simply drives off, you are not automatically left to cover the damage yourself. A dedicated fund, financed by every insurer operating in Malta, exists precisely for this situation — but it does not pay out the same way your own comprehensive policy would, and knowing the difference matters before you decide how to proceed.

Malta’s motor insurance basics

Third-party motor insurance is compulsory in Malta under the Motor Vehicles Insurance (Third-Party Risks) Ordinance, Chapter 104 of the Laws of Malta. Every registered vehicle on the road must be covered for the injury or death it could cause to third parties, and for damage to third-party property. Beyond that legal minimum, drivers can add comprehensive cover, which also protects their own vehicle regardless of fault.

The Malta Financial Services Authority (MFSA) oversees the insurance sector, and all licensed motor insurers in Malta follow a Handbook of Best Practice for Third Party Motor Liability Claims, issued by the Malta Insurance Association, which sets common standards for how claims are handled across the industry.

It is worth understanding why the compulsory minimum is structured the way it is. Third-party cover exists to protect people outside your own vehicle — pedestrians, other drivers, passengers in other cars — from being left without recourse if you cause an accident, rather than to protect your own financial position as a driver. This is precisely why comprehensive cover, which extends protection to your own vehicle and to a wider range of scenarios, remains optional rather than mandatory: the law sets a floor for protecting others, and leaves the decision about protecting your own assets to each driver individually.

When both drivers are insured: the standard claim

In the straightforward case — both vehicles insured, the other driver identified — the process runs through the at-fault driver’s own insurer. The innocent party reports the accident, submits a claim form with as much supporting detail as possible, and the insurer assesses liability before authorising repairs or compensation.

One practical complication that catches people off guard: if your vehicle is not roadworthy after the accident and needs assessment before an insurer authorises repairs, you may be without the use of your car for a period while liability is confirmed. Temporary repairs can sometimes keep a vehicle legally driveable in the meantime, but where repair costs are substantial, this waiting period can extend and become a genuine source of financial pressure independent of the eventual settlement.

Uninsured, unidentified or hit-and-run: the Protection and Compensation Fund

Where the driver at fault cannot be identified, or turns out to have no valid insurance, the claim does not simply disappear. The Protection and Compensation Fund (PCF) — established in 1986, originally known as the Security Fund — exists specifically to compensate victims in these situations. It is financed by contributions from insurers licensed to underwrite motor business in Malta, and day-to-day handling of most claims against it has been delegated to the Motor Insurers’ Bureau (MIB), which was itself established in 1986 and comprises all insurers licensed to transact motor business in Malta.

Because the PCF is funded through mandatory contributions from every licensed motor insurer in Malta, rather than general taxation, its solvency and continued operation are, in effect, underwritten by the same industry it protects claimants against. This structure is common across the EU precisely because it spreads the cost of uninsured and untraced drivers across the entire insured driving population, rather than leaving individual accident victims to absorb losses caused by drivers who broke the compulsory insurance requirement in the first place.

What the Fund actually pays, and what it does not

The scope of PCF compensation depends on what kind of loss is involved. Claims that are legally required to be covered by compulsory insurance — chiefly, third-party bodily injury — are paid in full by the Fund. Other claims, broadly covering property damage rather than injury, are capped: the Fund pays the lesser of 75% of the loss or €23,293.73.

What happens if the other driver’s insurer goes bankrupt

A separate but related scenario is where the at-fault driver was genuinely insured, but their insurer subsequently becomes insolvent before the claim is settled. In this case, the claim is addressed directly to the PCF rather than to the Motor Insurers’ Bureau, since MIB’s delegated role generally covers claims other than those involving an insolvent insurer. Recent EU-driven amendments have also broadened which insurers must contribute to the PCF, extending the obligation to insurers based in Malta that underwrite third-party motor business in other EU member states, not only business written in Malta itself — a change intended to keep pace with cross-border motor insurance activity.

Accidents involving foreign-registered vehicles

Malta’s rules for accidents involving foreign vehicles have been shaped by successive EU Motor Insurance Directives, which have progressively made cross-border claims faster to resolve than they once were. Where a foreign vehicle is involved, the Information Centre can confirm the insurance status of that vehicle and identify its nominated claims representative in Malta, which is usually the fastest route to establishing who is actually liable to pay before a claim is filed.

This matters more in Malta than it might elsewhere, given the volume of visiting drivers and rental vehicles on the islands, particularly during peak tourist periods. A claim against a foreign-registered vehicle is not fundamentally different in principle from a claim against a Maltese-registered one — the same compulsory insurance requirements generally apply under EU rules — but identifying the correct insurer and representative can take longer, and claimants should expect the identification step itself to add time to the process compared with a straightforward local claim.

The claim process, step by step

1. At the scene, gather evidence: photographs, the other driver’s details if available, and any witness contacts.
2. Report the accident to your own insurer promptly, even if you believe the other party is at fault.
3. Complete the claim form as accurately as possible, attaching photographs and any police report.
4. If the at-fault driver cannot be identified or has no valid insurance, the claim is directed to the Motor Insurers’ Bureau or, in cases of an insolvent insurer, to the Protection and Compensation Fund directly.
5. The insurer or Fund assesses liability and, once accepted, authorises repairs or issues compensation according to the applicable limits.

A worked example

Consider a driver in Qormi whose parked car is struck overnight by a vehicle that speeds off without stopping. No injury occurred — only bodywork damage, estimated at €4,000 to repair. Because this is a hit-and-run involving only property damage and no bodily injury, the Protection and Compensation Fund does not apply here at all; the driver’s only recourse, absent identifying the other vehicle, is their own comprehensive insurance, if they have it, or bearing the cost themselves.

Change one detail: the same overnight collision also clips a pedestrian who suffers a broken arm before the driver flees. Now the accident involves both property damage and bodily injury from an unidentified vehicle. In this version, the Fund’s hit-and-run exclusion for property-damage-only cases does not apply, since a serious injury did occur in the same incident — the injured pedestrian has a genuine claim against the Fund for the injury, even though the driver was never found, while the property damage portion remains subject to the lower, capped limit.

A third variant illustrates the insolvency scenario. Suppose the at-fault driver in a separate accident was genuinely insured at the time, but their insurer is later declared insolvent before the claim is paid out. Here, the claimant does not go through the normal channel of contacting the at-fault driver’s insurer, since that insurer can no longer meet its obligations — the claim instead goes directly to the Protection and Compensation Fund, which steps into the insolvent insurer’s place for exactly this purpose.

Frequently asked questions

Conclusion

The single most useful fact in this entire system is the one most people never learn until it is too late: hit-and-run accidents are only covered by the Protection and Compensation Fund when someone is seriously hurt, not when only your car is damaged. That single gap is exactly why comprehensive cover, rather than the compulsory minimum, is worth considering for anyone who drives regularly in Malta — not because the compulsory system is poorly designed, but because it was never meant to cover every possible loss, only the liability the law specifically requires every driver to carry.

The practical takeaway for anyone involved in an accident is to establish, as early as possible, which of these several scenarios actually applies — a straightforward insured-driver claim, an uninsured or unidentified driver, an insolvent insurer, or a foreign vehicle — since each follows a different process and, in some cases, a different compensation cap entirely. Assuming the standard insurer process applies when it does not can waste weeks before the correct claim route is even identified.

This article is for general information only and does not constitute legal advice. Insurance claim outcomes depend on the specific facts of each accident; consult a licensed lawyer or your insurer before making decisions based on this content.