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Motor Insurers prepare for Brexit

As with all things Brexit, there is a level of uncertainty in the motor insurance industry. With the UK’s exit from the EU on 29th March looming, the motor insurance industry is waiting with bated breath as to how UK and EU legislation surrounding motor insurance will change if there is no deal.

Currently, EU legislation allows drivers from any EU country to move freely throughout the EEA without the need to carry any documentation as proof of insurance. If the UK is unable to strike a deal with the European Commission and agree a ‘status quo’ type deal, there could be some changes to the way in which UK and EU drivers prove that they have valid insurance.

This would be done through carrying a ‘Green Card’, a document which in effect is a proof of your insurance and allows you to drive across the EEA. Some people may remember that this system was actually in place prior to the UK joining the EU in 1973. Though this is not a block to people driving in the EEA, it is something that the insurance industry has to be aware of as this could create a number of issues for both insurers and motorists alike.

Whilst motorists will not be charged for a green card, it is possible that insurers could charge an administration fee to process the request, as green cards will likely need to be printed on a universally accepted stock & colour. This is a topic that insurers are currently reviewing as part of their no deal, Brexit preparation. Motorists should be advised to contact their insurers well in advance of their proposed travel dates to make sure that their request can be handled by their insurer.

Other issues in a no deal scenario may include motorists not having the same ease of access in making compensation claims if they are involved in an accident whilst driving in the EEA. Currently there is a scheme that allows motorists to claim compensation if they are involved in a road traffic accident with a vehicle from a foreign country. If this isn’t agreed, motorists may have no choice but to pursue their claim in a foreign country and likely in a foreign legal system and language.

Whilst at the moment there is a level of uncertainty, it is important to note that alongside the UK government, there are a number of Industry Bodies looking to secure, maintain or even replicate the current scheme.