Trade Voice: What’s changed since 1886?

Graeme Trudgill Biba

As we approach the third anniversary of the London riots, the British Insurance Brokers’ Association is submitting its response to the consultation Reform of the Riot Damages Act 1886.

So, 128 years on, how does Biba view the proposals? In 1886 Karl Benz unveiled the Benz patent Motorwagen – widely regarded as the first car, although neither Prime Minister Gladstone nor Salisbury saw any need to include this in the Act at the time. So we were pleased to hear motor cars are due to appear in the revised Act.

However, this is not the progress we imagined. It is disappointing the Home Office is proposing that insurers are not able to recover their losses for motor vehicles. Surely the same moral principle of police accountability for riot damage and how the police are intrinsically linked to preventing or quelling such disturbances should remain.

We do not see why a policyholder should lose their no-claims bonus and excess, and the insurer foot the bill. The truth is only a small minority of third-party-only vehicles will benefit from this change.

We are pleased with the proposals to recognise riot areas, which should make it easier for individual property owners to establish a claim. We also agree that longer deadlines for making claims, interim payments and compensation on a new-for-old basis is needed.

We do not believe the decision on whether the activity is a ‘riot’ should lie with the police and crime commissioner. It should instead rest with a panel of independent officials. This will prevent the problems experienced by victims in 2011 where police and politicians evaded the term ‘riot’ in public addresses to avoid triggering compensation.

The introduction of a cap on the size of business that is eligible to claim – £2m turnover is being proposed – or the amount insurance companies can reclaim is unacceptable. We cannot see a case for discriminating against the size of a business. The police responsibility to maintain peace remains and the need for compensation is no less. We are joining the ABI in lobbying against this.

We disagree that riot claims should attract an excess. A non-fault motor accident victim is legally allowed to recover their excess from the negligent party. Therefore, we believe riot victims should be allowed to recover their excess.

Finally, Biba is pleased modern methods for submitting claims, such as email and phone submissions, will finally be accepted. How things have changed since 1886.

Graeme Trudgill
Executive director, British Insurance Brokers’ Assocation

This article was published in the 24/31 July edition of Post magazine.

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