- Contentious EU motor insurance rule scrapped in UK as Bill
passes through Parliament
- Cost-of-living boost as British motorists spared roughly £50
yearly insurance hike, with motorsports sector protected
from potential collapse
- ‘Vnuk’ law could have required vehicles such as golf buggies
and ride-on lawn mowers used on private land to be insured
British motorists will be spared a possible £50 annual insurance
hike, as the Government continues to assist with cost-of-living
pressures and uses post-Brexit freedoms to scrap a controversial
EU law.
A Bill to scrap the EU’s ‘Vnuk’ motor insurance law has passed
through Parliament today (Monday 25th April) and will
go on to receive Royal assent to confirm changes in the law.
The EU law could have required a wider range of vehicles beyond
cars and motorbikes to have motor insurance, such as golf
buggies, mobility scooters and quad bikes.
It would have extended to vehicles on private land, meaning even
people with a ride-on lawnmower at home would have potentially
required motor insurance. However other insurance options are
already available to people who need cover on their private land,
such as farmers.
Not implementing the law will prevent an almost £2 billion hike
for the country’s insurance industry, which would have translated
into a potential increase in individual insurance premiums of
around £50 per motorist per year.
Transport Secretary said:
“Sacking this nonsensical EU rule will protect the pockets of
hard-working British people as we continue to help ease cost of
living pressures.
“This is another Brexit win and I’m delighted this Bill has
rightfully passed through Parliament, saving billions of pounds
of additional insurance costs and protecting our world-leading
motorsports sector.”
The Bill was introduced to Parliament by .
said:
“I am delighted that Brexit has allowed me to promote a Bill
which could save the average motorist £50 per year.
“I am grateful for the help that the Motor Insurers’ Bureau and
the Government provided in drafting the Bill. My Motor Vehicles
(Compulsory Insurance) Bill is just a small example of our Brexit
dividend.”
Vnuk would have also covered motorsports collisions potentially
involving vehicles from go-karting to Formula One, which would
have been treated as regular road traffic incidents requiring
insurance.
This could have decimated the motorsports industry due to
additional insurance costs of roughly £458 million every single
year. Scrapping Vnuk will therefore save the world-leading sector
from potential collapse and secure hundreds of thousands of
industry jobs in the process.
The CEO of The Motor Insurers’ Bureau Dominic Clayden
said:
“The MIB welcomes the passing of the Motor Vehicles (Compulsory
Insurance) Bill. We have campaigned on this issue for a number of
years and we’re delighted that the necessary legislation to
remove the effects of Vnuk has now passed.
“Motorists will no longer be faced with the additional costs,
relating to future accidents on private land and accidents
involving a range of extra vehicles – including lawnmowers and
golf carts. This will save all motorists money and take us back
to the common-sense approach we had before the Vnuk ruling in
2014.”
In addition to the likely financial burden on British road-users,
the Vnuk rules are considered unnecessary as there are already
insurance packages available to Brits that cover certain risks on
private land.
Motor Insurance will still be required for any vehicles being
driven on roads or other public places, however, the removal of
Vnuk means insurance for vehicles used on private land is not
needed.
Notes to editors
- Vnuk is a 2014 European Court of Justice (ECJ) ruling on the
case of a Slovenian farmer, Mr Vnuk, who was knocked off his
ladder by a reversing tractor-trailer on a private farm in
2007.
- The ruling directed that the compulsory motor insurance
requirement must be extended to include vehicles being used on
private land, as well as potentially a greater range of vehicles
– potentially including those used in motorsports, agricultural
machinery and light electric vehicles (LEV).
- This contrasts sharply with the scope of the domestic
compulsory insurance requirement (in GB) under the Road Traffic
Act 1998 (RTA), which is limited to accidents on roads and other
public places and has a narrower definition of ‘motor
vehicle’.
- Implementing Vnuk would have been costly, in the region of £2
billion (covering existing motorcars, existing motorcycles,
existing business vehicles, motorsports and other business),
according to the Government Actuary’s Department (GAD).
- Focusing just on existing motorcars, GAD calculates that
insurance policyholders could face an estimated additional cost
of £1.227 billion if Vnuk was implemented – expressed as a
potential increase in individual insurance premiums of around £50
for 25 million consumers.
