International Underwriting Association warns against extending scope of European Motor Insurance Directive


The European Motor Insurance Directive (MID) should not be extended to include liability for accidents on private property, the International Underwriting Association has urged.

Commenting on a review of the directive, the IUA warned that protection provided under the legislation can only be effectively applied and enforced on public roads. An expansion of its scope to cover vehicles such as ride-on lawn mowers and mobility scooters used on private land would lead to widespread uninsured driving and fraud.

The MID states that all vehicles must be insured for third party liability, but certain types can be excluded by EU member states. A European Court of Justice judgement (Damijan Vnuk v Zavarovalnica Trigalev), however, ruled that an accident caused by a tractor on private land should have been covered by the directive, raising questions about how the law is currently implemented.

Responding to the European Commission the IUA recognised that victims of such accidents deserve compensation, but argued there are other legal mechanisms available for achieving this.

Chris Jones, IUA Director of Market Services, said: “In most EU member states there are well established employers’ liability insurance regimes that already adequately cover accidents on private land.

“The complexity of extending the current motor insurance regime to many millions of additional vehicles would risk reducing the accountability of employers or event organisers as they may seek to pass responsibility onto individual drivers.

“It would also be difficult and costly to enforce. Speed cameras, spot-checks and automatic number plate readers have helped to greatly reduce the number of uninsured drivers, but how effective could they be on private land? 

“Furthermore, increased levels of fraud and non-compliance, rising claims volumes and additional calls on the Motor Insurers’ Bureau would all, inevitably, pressure premium rates across the motor insurance and reinsurance market.”

The IUA’s consultation response also supported a proposal to improve the cross-border exchange of information on number plates and linked insurance policies. Permitting systematic electronic checks on insurance would help ongoing efforts to reduce uninsured driving.

It was not recommended, however, that the MID should determine different minimum covers for different vehicle types, for example, electric bicycles. Since the organisation of insurance markets and the cost of claims varies greatly across Europe, such measures would be better determined at a national level.