The government will scrap an “over-the-top law” that would have seen an estimated £50 annual increase in insurance premiums. This follows the UK’s exit from the European Union.
Under the controversial EU ‘Vnuk’ law, a wider range of vehicles would need to be insured. The list includes golf buggies, mobility scooters, quad bikes and vehicles used on private land. Even people with a ride-on lawnmower would require insurance.
Motorsport collisions would be treated as regular road traffic incidents requiring insurance. The government said Vnuk would have a disastrous impact on UK motorsport, costing the industry around £458 million a year.
In August 2007, farm worker Mr Vnuk was knocked off a ladder while working on a farm in Slovenia. He brought a claim for damages against the insurance company which had provided the compulsory motor insurance policy. The claim was rejected by the Slovenian courts, but in 2014 the case was referred to the European Court of Justice, which ruled in favour of Mr Vnuk.
In the UK, the Road Traffic Act (1998) requires motor vehicles used “on a road or other public place” to have unlimited insurance cover for third party bodily injury losses and a minimum of £1.2m cover for third party property damage losses. It does not require vehicles to be insured for incidents that occur on private land.
The situation would have changed had Britain remained in the EU.
The news has been welcomed by David Richards, chairman of Motorsport UK. He said: “Today’s announcement is a hugely significant victory for the UK and our sport, after a considerable effort by Motorsport UK and the Department of Transport over several years to defeat the threat of the Vnuk insurance issue.
“This decision provides stability as we seek to progress our sustainability agenda and protects the UK’s preeminent position at the forefront of motorsport technology worldwide. I would like to thank all those who played a part in securing this important outcome, including the MIA [Motorsport Industry Association] and the insurance industry.”
‘Unnecessary hike’
Had Vnuk been implemented in the UK, the insurance industry would have faced a bill of £2 billion in extra costs. These costs would have been passed onto to their customers in the form of increased annual premiums.
Transport secretary Grant Shapps said: “We have always disagreed with this over-the-top law that would only do one thing – hit the pockets of hard-working people up and down the country with an unnecessary hike in their car insurance. I am delighted to announce that we no longer need to implement it.
“Scrapping this rule would save the country billions of pounds and is part of a new and prosperous future for the UK outside the EU – a future in which we set our own rules and regulations.”
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