UK government plans to swerve EU Vnuk law

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The British government is planning to avoid the European Union’s controversial Vnuk law, which requires compulsory insurance for vehicles including golf buggies and mobility scooters even on private land.

The government estimates the move to can Vnuk in the UK will save drivers an average £50 annual premium increase. Were the law in place it would make the insurance industry liable for an addition £2bn in overall costs, the government has stated.

The move is also intended to “protect the existence” of the UK’s motorsports industry, according to a government update. Specialists have argued the law could make the sport too expensive.

Further, the government argued that Vnuk rules are “unnecessary” as insurance packages are available to cover risks of incidents on private land.

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.”

The Vnuk rules have previously been described by the Forum of Insurance Lawyers as having “crippling implications” and by industry bodies as virtually unenforceable.

Welcome

The insurance industry has welcomed the move to swerve the law.

Mark Shepherd, assistant director, head of general insurance, at the Association of British Insurers, said: “We welcome the government’s plan to scrap this unnecessary requirement. This should happen as quickly as possible.

“There would have been no easy way to monitor compliance and enforcement for those using their vehicles on private land. 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.”

Calum McPhail, Zurich head of liability claims, added: “The Vnuk decision introduced the potential that otherwise uninsured risks and costs would have to be met by the UK motor insurance industry despite the fact that no premium would have been obtained and therefore unfairly passing the costs to UK motorists.

“It will be a welcome and positive development if the government does move away from Vnuk.”

Allianz Insurance head of commercial motor, Gerry Ross said: “Broadly speaking this is a welcome move for customers and insurers. What will be particularly interesting to monitor will be the next steps for the future of mobility. Removing this rule potentially paves the way for e-scooters and other forms of micromobility to be used without the need for compulsory insurance. This is likely to lead to an increase in vulnerable road users, and less protection for those involved in an accident with one of these vehicles.”

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