Law 5/2025: what changes to car, motorcycle and other vehicle insurance

The Law 5/2025 Modifies the regulations for mandatory vehicle insurance in Spain. For those who already drive a car or motorcycle that is insured, the main obligation remains unchanged: the vehicle must continue to have mandatory civil liability insurance. What does change is the legal framework: the definition of motor vehicle is expanded, what is considered a traffic accident is clarified, guarantees for victims are strengthened, and new cases related to light personal vehicles are regulated.

This law is not intended to “lower car insurance,” but to adapt Spanish legislation to European regulations, better protect victims of accidents, and accommodate new types of mobility. Therefore, it affects cars, motorcycles, mopeds, certain cycles with auxiliary engines, trailers, imported vehicles, vehicles without insurance, accidents in private spaces, and light personal vehicles.

At PIB Group Iberia we can help you review your car insurance, Motorcycle insurance or mobility policy to check if the contracted coverages are aligned with the actual use of the vehicle, your risks, and the current regulatory changes.

What is Law 5/2025?

The Law 5/2025, of July 24, It amends the consolidated text of the Law on Civil Liability and Insurance in the Operation of Motor Vehicles, approved by Royal Legislative Decree 8/2004, and also introduces changes to Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities.

Its main objective is to complete the transposition of European Directive 2021/2118 on civil liability insurance resulting from the circulation of motor vehicles and to adapt the Spanish system to new scenarios of mobility, claim and compensation.

You can consult the official text in the BOE of Law 5/2025.

When Law 5/2025 came into effect

Law 5/2025 was published in the BOE on July 25, 2025, and, in general terms, it entered into force the day after its publication. However, the law itself provides for exceptions for certain sections.

One of the most relevant points is the one regarding the light personal vehicles, whose specific insurance obligation came into effect on 2 January 2026, Until further regulatory development. Subsequently, Royal Decree 52/2026 regulated the Register of Light Personal Vehicles.

You can consult the Royal Decree 52/2026 on the Registration of Light Motor Vehicles.

Does something change in mandatory car insurance?

For conventional tourism, Law 5/2025 neither eliminates nor reduces the obligation to have insurance. Every owner of a motor vehicle with regular parking in Spain must subscribe to and maintain in force a mandatory civil liability insurance.

What changes is the legal context in which circulation is interpreted, insured vehicles are identified, claims are processed, and the rights of the injured are protected. Therefore, if you already have a car insured, that doesn't mean you have to sign up for a completely new policy under Law 5/2025, but it is worth checking whether your insurance suits your actual use.

Specifically, it is worth reviewing:

• Compulsory civil liability.
• Voluntary civil liability.
• Legal defense and claim for damages.
• Travel assistance.
• Own damage, theft, fire and lightning.
• Private use, professional use, fleet or company vehicle.
• Vehicles in garages, parking lots, private properties or closed enclosures.
• Situation if you change car, temporarily deregister the vehicle or import a vehicle from another country.

Does something change in compulsory motorcycle or moped insurance?

Motorcycles and moped vehicles were already subject to mandatory insurance. Law 5/2025 does not create for the first time the obligation to insure a motorcycle in Spain; it updates and expands the legal framework of mandatory insurance.

The reform is indeed relevant for certain vehicles classified as L1e-B and cycles with auxiliary motor that exceed certain speed limits, because they may fall within the insurance obligation.

In practical terms, if you have a motorcycle or moped, check:

• That mandatory insurance be in effect.
• That the declared use matches the actual use.
• If the vehicle is used daily, only for leisure, for delivery or for professional activity.
• If you need assistance on your journey from zero kilometers.
• It would be advisable to increase civil liability funds.
• If there are accessories, equipment, or a helmet covered.

Which vehicles are considered motor vehicles

Law 5/2025 incorporates a new definition of motor vehicles for the purposes of mandatory insurance. In general terms, it includes vehicles driven exclusively by mechanical force that travel on the ground, do not use a railway track, and meet certain speed or weight criteria.

On mobile, slide the table horizontally to see all the information.

What is the effect of the new law on circulation?

One of the key points of Law 5/2025 is the definition of fact of circulation. The rule considers that there is traffic when a motor vehicle is used in accordance with its function as a means of transport at the time of the accident, regardless of the characteristics of the vehicle, the terrain, or whether it is stationary or in motion.

This is important because it can help avoid confusion in accidents that occur outside the traditional public road, such as garages, parking lots, private properties, indoor enclosures, or restricted access areas, provided that the use of the vehicle is in accordance with its function as a means of transportation.

Nevertheless, not all use of a vehicle will be made from the road. The law excludes, for example, certain events and automobile activities, the use of the vehicle as a means to cause intentional damage or movements exclusively in restricted areas of ports and airports, without prejudice to other warranty or insurance obligations.

Light personal vehicles: mandatory insurance from 2026

Law 5/2025 creates a specific mandatory insurance for light personal vehicles, These vehicles are not considered motor vehicles in the strict sense, but they do participate in traffic and require civil liability coverage.

For the purposes of this requirement, the standard considers light personal vehicles to be those that travel on the ground using one or more wheels, have a single seat, are propelled exclusively by electric motors and reach certain maximum speeds specified by their weight.

In 2026, Royal Decree 52/2026 regulated the Register of Light Personal Vehicles. The DGT has also indicated that owners of LPV must register the vehicle in the National Vehicle Register as a prerequisite for mandatory insurance.

You can consult the official information from the DGT about the Registration of Light Personal Vehicles.

What minimum coverage does Law 5/2025 require for light personal vehicles?

For light personal vehicles, Law 5/2025 establishes a minimum civil liability coverage:

On mobile, slide the table horizontally to see all the information.

These minimum coverages should not be confused with additional guarantees. A policy may include legal defense, driver’s accident coverage, own damage, theft, assistance, or other coverages, but that will depend on the contract.

Penalties for driving without insurance

Driving without compulsory insurance remains a relevant violation. Failure to comply with the obligation to insure may result in a ban on driving, the vehicle being impounded, or the vehicle being impounded and a fine imposed.

For motor vehicles, the general regime provides for monetary penalties of 601 to 3,005 euros, They are graduated according to whether the vehicle was in traffic or not, its category, the service it provides, the severity of the damage caused, the duration of the lack of insurance, and the repetition of the offense.

For light personal vehicles, Law 5/2025 establishes that the applicable fines will be one-third of those applicable to motor vehicles.

Does Law 5/2025 reduce car insurance?

No. Law 5/2025 is not a premium reduction rule and does not oblige insurers to lower the price of car or motorcycle insurance.

What it does is update the legal framework for compulsory insurance, the definition of a motor vehicle, the rules for claiming, the circumstances in which the Consortium intervenes, and the regulation of certain vehicles that could previously have raised doubts.

The price of your insurance can depend on factors such as:

• Historyrial of accidents.
• Age and experience of the driver.
• Type of vehicle.
• Private or professional use.
• Traffic zone.
• Garage or usual parking space.
• Contracts for roofing have been signed.
• Franchise, assistance and own damages.
• Subscription policy of each insurer.

What changes in accident claims

Law 5/2025 strengthens certain aspects of extrajudicial claims. The injured party or their heirs have direct action against the insurer, but before resorting to judicial proceedings they must notify the insurer of the accident and request the corresponding compensation.

The insurer must submit a motivated offer or response within three months from the receipt of the claim. If the offer is not submitted without a justified reason attributable to the insurer, late interest may accrue.

Furthermore, in the event of dissatisfaction with the offered solution, additional expert reports can be requested, including to the Institute of Forensic Medicine and Forensic Sciences, in accordance with the terms provided for by the law.

Motivated offer and expert medical report

The motivated offer is the compensation proposal made by the insurer when it establishes that liability has been proven and the damage quantified. Law 5/2025 reinforces the role of medical and expert documentation.

In injury claims, it is important to check:

• Date of notification of the accident.
• Medical documentation provided.
• Final expert medical report.
• Three-month deadline for an offer or a motivated response.
• Possibility of a supplementary report.
• Delay interest if the insurer fails to meet deadlines without a justifiable reason.
• Time limit for the action.

Insurance Compensation Consortium: new relevant cases

The reform strengthens the role of the Insurance Compensation Consortium in several cases related to uninsured vehicles, stolen vehicles, disputes over who should compensate, and insolvent insurers.

This is important for the victim of an accident because it prevents them from being left unprotected when the insurance company is unable to respond or when the causing vehicle is not insured.

Relevant assumptions include:

• Accidents caused by an uninsured motor vehicle.
• Accidents involving vehicles that have been deregistered and are driving without authorization and without insurance.
• Insured vehicles that have been the subject of theft or theft in use.
• Controversies between the insurer and the Consortium over who should be compensated.
• Insolvent insurers or in bankruptcy or liquidation proceedings.
• Certain cross-border situations within the European Economic Area.

Accidents in garages, parking lots or private properties

The fact definition of circulation allows for coverage of situations that do not always occur on a road or public roadway. This can be relevant in accidents in garages, parking lots, private premises, farms, or interior areas.

The important thing will be to analyze whether, at the time of the accident, the vehicle was being used in accordance with its function as a means of transport. It is not enough that the vehicle exists or is parked: the specific circumstances of the accident must be reviewed.

Examples that may require analysis:

• Slap for maneuvering in a community garage.
• Accident in a private parking lot.
• Damage when leaving a farm or closed enclosure.
• Accident involving a stationary but in use vehicle as a means of transport.
• Damage caused by a trailer or semi-trailer.

Imported vehicles: temporary insurance and 30-day period

Law 5/2025 also regulates the circumstances in which vehicles imported from another member state of the European Economic Area are covered. For a maximum period of 30 days from the time the buyer accepts the delivery of the vehicle, it may be considered that they have habitual parking in Spain for the purposes of settling the claim, even if they do not hold a Spanish registration plate.

In these cases, the person responsible for subscribing to and maintaining the insurance can choose between insuring the vehicle in the member state of registration or, after acceptance of the delivery, insuring it in Spain.

If you buy an imported car or motorcycle, it is not advisable to drive without knowing the following:

• State of registration.
• Date of acceptance of delivery.
• Temporary insurance or insurance at the border.
• Responsible for contracting the insurance.
• Documentation for driving.
• Cover during the transfer.

If you change car, what happens to the insurance?

Law 5/2025 does not automatically convert your old policy into one that is valid for any new vehicle. If you change cars or motorcycles, you must notify the insurer or intermediary before driving with the new vehicle.

In practice, the insurer can:

• Issue a new policy.
• Modify the existing policy.
• Recalculate the premium.
• Adjusting coverage according to the new vehicle.
• Request documentation of purchase, registration, or technical specifications.
• Review regular driver and declared usage.

It is not advisable to assume that insurance is “transferred only”. Before picking up the vehicle, make sure that the policy is issued or modified with the correct effective date.

What to check in your car or motorcycle insurance after Law 5/2025

The reform does not require all drivers to switch insurance providers, but it is a good opportunity to check whether the current policy adequately covers the actual use of the vehicle.

See review checklist

• Mandatory insurance in effect.
• Voluntary civil liability.
• Legal defense and claim for damages.
• Travel and towing assistance.
• Replacement vehicle.
• Own damage or franchise.
• Robbery, fire, moons and natural phenomena.
• Private use, professional use, fleet use or distribution.
• Regular drivers and occasional drivers.
• Trailers, accessories or additional equipment.
• Use in garages, parking lots, farms or private premises.
• Conditions in case of imported vehicle or change of vehicle.

Common errors in interpreting Law 5/2025

• Thinking that the law lowers the price of insurance: It does not regulate a general reduction in premiums.
• Believing that it only affects cars: It also affects motorcycles, mopeds, certain motor cycles, trailers and light personal vehicles.
• Assuming that home insurance covers mobility: A vehicle subject to mandatory insurance needs an appropriate policy.
• Not insuring a vehicle that is being written off if it continues to be used: Driving without insurance can lead to penalties and liability.
• Do not inspect imported vehicles: It may be necessary to take out temporary or border insurance.
• Not correctly identifying the light personal vehicle: Registration, labeling, and insurance are key in 2026.
• Confusing temporary absence with absence of risk: If the vehicle is in motion or causes damage, liability may arise.
• Not claiming properly after an accident: Out-of-court claims, deadlines, and reports are important.

Frequently asked questions about Law 5/2025 and mandatory insurance

Does Law 5/2025 require me to change my car insurance?

Not necessarily. If your car already has mandatory insurance in effect, you do not have to automatically switch policies under Law 5/2025. However, it may be advisable to review coverage, capital, legal defense, assistance, and declared use.

Is motorcycle insurance mandatory in Spain in 2026?

Yes. Motorcycles and mopeds subject to insurance must have mandatory insurance in effect. Law 5/2025 updates the legal framework, but the obligation already existed for these vehicles.

Does Law 5/2025 affect electric scooters?

Yes, to the extent that certain personal mobility vehicles can be classified as light personal vehicles and are subject to registration and mandatory insurance in accordance with Law 5/2025 and its implementing regulations.

What happens if a vehicle without insurance causes an accident?

The Insurance Compensation Consortium can compensate the injured parties in certain cases involving uninsured vehicles, without prejudice to the corresponding powers of reprisal or recovery against the responsible parties.

What happens if the other party's insurer becomes insolvent?

The reform strengthens protection mechanisms for victims residing in Spain when insolvent, bankrupt, or under liquidation insurance companies intervene within the circumstances provided for by the law.

What happens if I have an accident in a private parking lot?

It can be considered a fact of circulation if the vehicle was used in accordance with its function as a means of transport. The specific circumstances of the accident will have to be examined.

Compare your insurance with personalized advice

Law 5/2025 does not replace the need to review each policy. Two seemingly similar vehicles may require different coverage if usage, driver, driving environment, professional activity, the presence of a trailer, or the desired level of protection change.

At PIB Group Iberia we can help you review your car, motorcycle or mobility insurance, identify any coverage gaps and assess whether it makes sense to adjust the policy following regulatory changes.

Requests a personalized assessment and sarewe reviewed what alternative of car insurance or the mobility policy may suit you better.