A game-changer for UK motor insurance
Government reviews motor insurance laws
This review could affect your insurance cover and premiums.
We could be seeing huge changes to motor insurance law in order to improve the way victims can claim compensation in a wider range of circumstances.
This review was prompted from a ruling by the European courts in 2014 which resulted in the Vnuk judgment. The Vnuk case has now sparked a review of the current motor insurance law. This review will have an impact in the UK regardless of the EU status.
There will be changes made which will affect you, your opinion is needed. Read on to find out more and take the Government survey.
To first read a summary to learn why the motor insurance is under review click here.
What does this mean for you and your insurance?
The main benefit of making changes to the motor insurance laws will be to support victims who suffer damages on private land and other circumstances that are not currently protected. In turn this will have further consequences both good and bad, take a look.
- More victims of accidents will have a straightforward route to compensation
- More people would need to buy an insurance policy
- There could be a price increase to your annual premium to cover the increase in potential claims from your insurance provider and the MIB (Motor Insurance Bureau).
- If you own a vehicle which is SORN (Statuary Off-Road Notification), then currently this removes the need for road tax and motor insurance. However this scheme may have to change in light of the new options the Government is facing.
- If the Government considers a wider range of vehicles then a decision must be made about what penalties would be imposed if there was a failure to comply. The penalties may vary depending on the vehicles from conventional car drivers.
- If the Government considers a wider range of vehicles then these vehicles may need to be registered on the MID (Motor Insurance Database).
- There is a potential for fraud to increase. Given that many of the accidents under the comprehensive option will occur on private land away from CCTV and witnesses; this could increase temptation for people to make fraudulent claims. Particularly if people see the MIB as a source of compensation.
- The police may also become inundated with reports which will add complications to their current roles.
- The motor sports industry may be affected
What does this mean for the UK motor insurance?
The government is now reviewing the law governing motor insurance. The intention is to provide a means of compensation for victims of accidents that aren’t necessarily on roads or public areas. UK motor insurance will be affected. There are two main options that the Government is having to decide between:
OPTION 1: Known as the Comprehensive option. This will offer victims compensation for accidents that occur on private land. This means changing the UK motor insurance law to comply with the Motor Insurance Directive interpreted by the Vnuk judgement. All vehicles under the new option would be required by law to have third party insurance, even when a vehicle is used purely on private land. Changes to the current laws are set out below:
- Car accidents on private land would be covered, whether the driver is uninsured or has third party liability. This is new to the current insurance laws.
- Newly-in-scope vehicles (a broadened range of vehicles to be insured – see below) which have accidents where the land has public access to will be covered, even if the driver was not insured for third party liabilities. This is new to the current insurance laws.
- Newly-in-scope vehicles will be covered even if the accident is purely on private land, even if the driver was not insured for third part liabilities.. This is new to the current insurance laws.
OPTION 2: The amended Directive option. This will offer victims compensation for accidents that occur on land over which the public has access to. This option will change the Road Traffic Act 1988. Following public opinions, this is the most favoured choice by the Government. Third party insurance will not be compulsory on private land, however newly-in-scope vehicles will need to be insured where there is public access. Changes to the current laws are set out below:
- Car accidents on private land would be covered if the driver had third party liability which in this case is optional. This is the same as insurance laws are now.
- Car accidents on private land where the driver does not have third party liability is not covered. This is the same as insurance laws are now.
- Newly-in-scope vehicles (a broadened range of vehicles to be insured – see below) which have accidents where the land has public access to will be covered, even if the driver was not insured for third part liabilities. This is new to the current insurance laws.
- Newly-in-scope vehicles that have third party liability (optional) will not be covered for accidents on private land unless insurance covers this already. This is the same as we have now.
- Newly-in-scope vehicles that do not have any third party liability will not be covered for accidents on private land which is the same as insurance laws are now.
Read on to have your say on the Government motor insurance consultation.
What are Newly-in-scope vehicles?
If the Government were to go ahead with the Comprehensive option or the amended Directive option, the definition of a motor vehicle (classed as the Newly-in-scope vehicles) could be broadened to include:
- Electrically assisted pedal cycles
- Construction vehicles
- Agricultural vehicles
- Ride-on lawnmowers
- Motor sports vehicles
- Mobility scooters
- Golf buggies
- Motorized ride-on children’s toys
- Fairground rides (e.g. dodgems)
- Fork lift trucks
- Dumper trucks
- Engineering plant
- Quad bikes (off-road construction)
This means that the vehicles listed above will require compulsory insurance. If the Government were to opt for the amended Directive option then ‘Newly-in-scope’ vehicles on private land would not be covered which means current levels of required cover would remain the same for private land (which could see the motor sport industry protected- more to come on this topic).
There will also be changes to the levels of insurance. Motor vehicles which have third party insurance cover will be covered for use in areas which have public access, whereas comprehensive cover would extend to insurance on private land.
What can you do?
Your opinion counts. If you would like to find out more head to the Government website and have your say. The consultation period began on 20th December 2016 and will end on 31st March 2017, have your say before the closing date. There is an online survey for you to complete here.
This is believed to be accurate as of 21st December 2016. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual. All data and information provided on this site is for informational purposes only. Heritage Insurance Brokers (the company) makes no representations as to the accuracy or completeness of any information on this article or found by following any link on this site. The company will not be liable for any errors or omissions in this information nor for the availability of this information. The company will not be liable for any losses, injuries, or damages from the display or use of this information.