In this guide we look at what the law demands, the real risk of running on the minimum limits, and the strategies that genuinely shield what you own.
What the law actually requires
To drive legally in the country, the State requires you to keep a mandatory traffic accident policy (SOAT) in force.
That instrument has a strictly limited purpose: to compensate third parties up to the minimum amounts set by the Traffic Regulations. The limits are exact: B/.5,000 per person and B/.10,000 per accident for bodily injury, and B/.5,000 for damage to others’ property. Nothing more.
The SOAT offers no coverage or compensation whatsoever for damage to your own vehicle. Driving without this policy active is an offence; the Land Transit and Transport Authority (ATTT) has the power to tow the vehicle to an authorised impound yard. Recovering it requires presenting a valid policy and covering the towing and fine costs, which accrue late-payment surcharges if not settled on time.
The difference in one table
| Feature | Mandatory policy (SOAT) | Full coverage |
|---|---|---|
| Required by law? | Yes, essential to drive. | No, unless required by bank financing. |
| Covers damage to your car? | No. | Yes: collision, rollover, theft, fire, flooding. |
| Third-party coverage | Only the required legal minimums. | Substantially higher sums. |
| Towing and roadside assistance | Limited or not included, depending on the insurer. | Yes, with broad coverage. |
| Reference cost | ~$125 – $275 per year* | ~$45 – $125+ per month (by type and value of the car)* |
*The prices shown are approximate estimates, published only as a reference guide and excluding the 5% tax. Your real premium depends on your profile, your coverages and the insurer; to know the exact price for your particular needs, request a quote.
The real risk of staying on the minimum
The most expensive financial mistake is assuming that “being right with the law” equals being protected.
The B/.5,000 of property damage cover runs out fast when you hit practically any recent vehicle: a pickup or a mid-range car exceeds that amount in parts and labour alone. Everything above it falls directly on your personal liability, putting your savings and assets at risk — while your own car goes unrepaired.
The truly critical scenario, however, is not bodywork: it is injuries. A single hospitalised person consumes the B/.5,000 legal minimum within days. From that point on, the financial responsibility is entirely yours.
The strategic advice: raise your third-party limits
After years structuring policies and managing claims, the recommendation that delivers the most peace of mind for the least money is this: always buy liability limits above the legal minimum, even if you decide to keep only basic cover for your own car.
Moving from B/.5,000 to limits of B/.25,000, B/.50,000 or more for third-party damage and injury costs relatively little, because the liability premium is one of the cheapest components of car insurance. But on the day of a serious collision, that difference determines whether the insurer absorbs the full impact or the excess destroys what you own.
The legal minimum exists so the traffic system works; your personal limit should exist so you sleep at night.
Clarification: the myth of the 25% legal discount
You may have heard outdated information about a law granting discounts. The National Assembly approved a bill in 2025 requiring insurers to give a 25% discount to claim-free drivers. That bill was vetoed in full by the Executive in October 2025 and is not in force.
What is real today are commercial discounts for good claims experience — years without claims. These are not a right established by law, but a competitive advantage certain insurers offer and that your broker can and should negotiate when quoting or renewing your policy.
Frequently asked questions
Can I legally drive with only the mandatory policy?
Yes, it is legal. But your vehicle is completely exposed, your protection against third-party claims is minimal, and your roadside assistance will be limited or non-existent. If your car has commercial value or you use the road daily, basic coverage runs out very quickly.
What happens if I am stopped without valid insurance?
It is an immediate ticketable offence and the vehicle can be towed to the ATTT impound yard. To recover it you must present a valid policy and pay the fine, plus the towing and storage costs.
If my car is financed, am I required to carry full coverage?
In practice, yes. Banks require it as a non-negotiable condition of the loan to protect the asset securing the debt, and they ask to be named as beneficiaries through an assignment of the policy. Once the loan is paid off, keeping full coverage becomes your decision.
Is there a 25% legal discount for claim-free drivers?
No. The National Assembly approved a bill to that effect in 2025, but it was vetoed in full by the Executive in October 2025 and is not in force. What does exist are commercial discounts for good claims experience — not a legal right, but an advantage your broker can negotiate when quoting or renewing.
Your broker’s role: with you at every stage
Anyone can issue a mandatory policy online, but the real value of an independent broker shows across the whole life cycle of your insurance. Our commitment covers three pillars:
- Advice when choosing: we analyse the market to structure a policy that genuinely protects what you own — optimising your third-party limits and weighing own-damage cover — at the most competitive price.
- Renewal and annual maintenance: we proactively review your policy at every renewal, negotiate the commercial good-experience discounts you are entitled to, and make sure your coverage stays solid.
- Claims management: if you face a loss, we manage the process for you. We take on the administrative burden with the insurer and the shop, protecting your legal and financial interests.
One fundamental detail: using a broker adds no extra cost to your policy. Insurers absorb our commission within the regular rate. You invest exactly the same as buying direct, backed by an expert team dedicated to protecting your investment.