Context
The Department for Transport has confirmed plans to scrap the controversial EU ‘Vnuk’ law. If the regulations had been implemented the Motor Insurance Bureaux (MIB) would have been liable for compensating all accidents caused by any vehicle used on public and private land, where there is no requirement for insurance and therefore no corresponding insurance premium. The ABI called on Government to stop these regulations, generally seen in the UK by Government and the ABI as unnecessary, coming into force.
As a result, the Government now plans to scrap the ‘Vnuk’ motor insurance law which requires insurance even on private land for a wider range of ‘vehicles’, including ride-on lawnmowers and mobility scooters. The move will ensure that British drivers are spared an estimated £50 annual increase in insurance premiums.
In relation to the potential increased costs involved in the implementation of the Vnuk law, read the Government Actuary Department research about the Vnuk decision and its effect on domestic motor insurance.
Transport Secretary Grant Shapps said that the UK Government has always disagreed with this law and that he was delighted to announce that it will no longer be implemented.
As well as the likely financial burden on British road-users, the Vnuk rules were considered unnecessary as there are already insurances (albeit not compulsory) available in the UK that cover certain risks on private land.
Mark Shepherd, Assistant Director, Head of General Insurance, at the ABI, said that the ABI welcomes the Government’s plan to scrap “this unnecessary requirement”, and that this should happen as quickly as possible. Mr Shepherd said that there would have been no easy way to monitor compliance and enforcement for those using their vehicles on private land, and that It would also have been difficult to establish the circumstances of any claim, so increasing the scope for fraud, that ultimately ends up being paid for by motorists through their insurance premiums.
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