Insurance clampdown poses threat to fleet
11 January 2011
Author: Tristan Young
Businesses that own their fleet vehicles are facing possible fines and a certain paperwork headache in 2011, thanks to an up-coming change to insurance law.
Due to be implemented later this year, the new law, known as Continuous Insurance Enforcement, means a car's registered keeper will be held liable if the vehicle is not on the Motor Insurance Database. If a vehicle is found not to be on the database the owner faces a £100 fine for the offence.
While the law is new, the regulations that allow for this are not, and are part of the Road Safety Act 2006. However, only now is the Government beginning to put the rules onto the statute books. The changes are part of the Government's crack-down on Britain's near-two million uninsured drivers, and while fleets are not often offenders in this area, they have been swept up in the new rules.
The exact timing of the law's introduction has not yet been set, but BusinessCar sources say it could be as soon as April.
Unlike the existing offence of driving without insurance, it is the vehicle's registered keeper, rather than driver, who will be held to account. So for fleet cars it will be the company that owns the vehicle that could be fined.
The DVLA's figures show there are 53,000 company-owned cars that are not on this database. The vast majority of these will be insured, but administrative errors mean they are not on the database.
When the final timing of the legislation is confirmed the DVLA will write to those registered keepers of vehicles not on the database giving them 28 days to rectify the situation. This can be done by talking to the insurer to make sure all vehicles are on the database. Failure to do this will result in the issuing of the £100 fine, reduced to £50 if paid within 14 days. However, persistent failure to comply could result in a car being seized and destroyed.
While those businesses that lease their vehicles will not be liable under the new law, the lease firms that operate the vehicles will be. However, the more proactive lease companies will already be gearing up to deal with the situation.
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