ABI welcomes government plans to scrap Vnuk law

Transport Secretary Grant Shapps has announced that the government no longer intends to implement the EU’s Vnuk motor insurance law. 

The government believes that scrapping the law, which requires a wide range of vehicles (including ride-on mowers and mobility scooters) to be insured – even if they are only used on private land – will save motorists a £50 hike in their motor insurance premiums.

Named after Slovenian farmhand Damijan Vnuk who was knocked off a ladder by a farm vehicle in 2007 and subsequently involved in a landmark legal dispute, the Vnuk law has never sat well with UK insurers. The ABI’s head of general insurance Mark Shepherd welcomed the proposed scrapping of ‘this unnecessary requirement.’ 

Shepherd argues that because claims arising on private land are inherently hard to verify, they are particularly vulnerable to fraud, the cost of which would ultimately fall on law-abiding policyholders.

The estimated £50 saving from not implementing the unloved law is based on Government Actuary Department research into the implications of the Vnuk decision and its effect on domestic motor insurance.

Not implementing Vnuk will also avoid the Motor Insurance Bureaux becoming liable for compensating those involved in vehicle accidents on public and private land, where there is no requirement for insurance and therefore no corresponding insurance premium.

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