The review was prompted by a ruling by the European courts in 2014 which resulted in the Vnuk judgment, a case which has now sparked a review of the current motor insurance law and will have an impact in the UK regardless of the EU status.
The UK government is currently consulting on the potential amendments and Heritage is encouraging people to have their say before March 2017 and take the government survey.
The Vnuk judgment has generated some potentially costly consequences and challenges to motor insurance. Mr Vnuk, a farm worker, was knocked from his ladder by a trailer attached to a tractor which took place on private land. When he tried to claim for damages against the insurer of the tractor, he lost the case due to the wording of the current Directive.
Mark Wilkinson, managing partner at Heritage Car Insurance, commented, ‘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, but this may have consequences.’
According to Heritage, the changes could mean:
1. More victims of accidents will have a straightforward route to compensation.
2. More people would need to buy an insurance policy.
3. There could be a price increase to annual premiums to cover the increase in potential claims from your insurance provider and the MIB (Motor Insurance Bureau).
4. 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 could have to change in light of the new options the government is facing.
5. 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.
6. If the government considers a wider range of vehicles then these vehicles may need to be registered on the MID (Motor Insurance Database).
7. 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.
8. The police may also become inundated with reports which will add complications to their current roles.