Compulsory motor insurance, as set in the Traffic and Road Transport Law, has finally been regulated by Decree No. 809 of 19 December 2007, issued by the President of the Republic of Ecuador.

Compulsory motor insurance must be taken annually by any individual, company or public entity that owns a vehicle, without exception. It can only be contracted with the insurance companies authorised for that purpose by the insurance regulator. Compulsory motor insurance is a requisite for any vehicle in Ecuador. It is necessary in order to register the vehicle, obtain its permit, certificate of ownership or history, as well as to sell it.

Compulsory motor insurance, as regulated, cannot be substituted by any other contract or policy of insurance. However, it is compatible with any other policies that may have been taken specifically for each vehicle.