What to know before buying an insurance policy in Latvia

When choosing an insurance policy, price alone isn't enough — contract terms such as the deductible and which risks are actually covered matter just as much. This is highlighted in an explainer prepared with the Bank of Latvia and the Latvian Insurers Association (LAA), which points to the Insurance Contract Law and the Insurance and Reinsurance Distribution Law governing the rights and duties of both parties.

Insurance can be voluntary or mandatory — for instance, all vehicles must carry mandatory third-party liability insurance (OCTA). Types of insurance include life insurance, non-life insurance (property, liability, travel, accident), credit insurance, health insurance and mandatory insurance. The LAA has produced a basic guide and roadmaps for nine insurance types to help consumers understand the purchasing process.

Comparing offers

Before signing, it is advisable to compare several offers. The article gives an example involving a house worth €180,000: an offer covering the full property value with broad risk coverage and a reasonable premium is more favorable than one with a lower insured sum, limited coverage, a high deductible and a higher premium.

Before concluding a contract, the insurer identifies the client's needs and prepares an offer specifying covered risks, exclusions, the insured sum and premium. It is important to carefully review the documents and confirm the policy covers the necessary risks — for example, flooding for a riverside house or rainwater damage in an apartment building.

Uninsured risks

Under amendments in force since 1 July 2026, policies issued to individuals must list both insured and uninsured risks, helping clients better understand their choices. In practice, clients often pick the cheapest option without noticing missing coverage — such as trip cancellation, high-risk sports activities, or flooding caused by heavy rainfall in property insurance.

Policies can be issued electronically or on paper, and a duplicate of a lost policy can be requested from the insurer, possibly for a fee. Additionally, amendments effective since 12 December 2025 require that contract terms for individuals be written in plain language, with this requirement phased in for different insurance types through 2028.