How New Car Insurance Regulations Impact on us all

All motorists would do well to learn the rules that govern car insurance, whether or not they use their vehicles. In June 2011, Continuous Insurance Enforcement (CIE) was implemented, mainly to bring uninsured drivers to book. According to CIE, every vehicle has to be insured or must have DLVA registration as off the road – officially called as SORN (Statutory Off Road Notification). However, as per a study conducted by Post Office a year later reveals that more than 20% of the drivers are still in the dark about the new rule.

Unintended violation of law by motorists

Fundamentally, it has been seen that motorists violate law due to ignorance and hence are exposed to the risk of coughing up heavy penalty. According to Gerry Barrett, head of insurance at the Post Office, many drivers are unaware of the new regulations since some time ago it was not illegal not to have car insurance if your vehicle was not in use.

What do the new rules imply?

During the time of renewal of a car insurance policy, many drivers prefer to go for new one. As per the new rule, you need to buy insurance policy for your vehicle even if you use it once in a while, or only during vacation or for a specific purpose. You have to get such a vehicle insured or obtain a SORN officially.

How much fine would a defaulter incur?

In the absence of an insurance policy for your vehicle, you shall be issued a warning notice that a penalty – that could vary from fixed fine of £100 to maximum fine of £1,000 – would be levied if you failed to act immediately. Vehicles of defaulters could be wheel-clamped, seized or trashed too. During the last year alone, the department has issued in excess of 340,000 warning notices and 120,000 fixed penalty notices.

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Was there a need for CIE?

The latest rules require methodical comparison of DVLA records with Motor Insurance Database (MID). These rules were introduced to deal with all those uninsured drivers who unabashedly use UK roads. Uninsured driving amounts to more than £500m annually due to which a law abiding motorist has to pay an additional amount of £30 towards premium. As per Motor Insurers’ Bureau (MIB), this money goes to a central fund for assisting road accident victims who suffer due to careless, uninsured and absconding drivers. Further, as per MIB, in the first year after implementing CIE, the number of uninsured driver has come down to 1.2 million which was 2 million during 2004-05.

Drivers who do not have insurance

MIB feels they haven’t yet achieved their mission. As per Simon Douglas of AA, about 4% drivers are still uninsured, who kill 160 people and injure another 23,000 annually. According to him, motorists need to adhere to the new rules.

Policy protection

Some insurers are quick to advertise that in case policy holders suffer a car crash due to an uninsured driver and apply for insurance claim, their no-claims bonus wouldn’t be affected. But, insurance experts warn the public not to get carried by such promos. Will Thomas, car insurance expert at avers that such policy holders that suffer from accidents due to uninsured drivers can receive compensation from MIB, in which case their no-claims bonus will stay untouched. According to him, despite such assurances from insurance providers, the policy holders will notice their premiums going up subsequently. The insurance companies will most likely categorize them as accident-prone people. You may visit this link to know how accidents that happen for no fault of yours can raise your insurance premium.

It helps to be a law abiding citizen

The MID has to have a record of all insured vehicles. Please verify that your motor insurance details appear on the records of askMID and are correct.

Please stay and leave a comment in the fields below – have you fallen foul of the new rules?  Should it even matter?

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