National Motorsport Academy

Will racing car insurance become compulsory in the future?

Before I give you the details, a recap. We all know that we need insurance for our cars on the road – this is enshrined in the Road Traffic Act 1988.

A cornerstone of this requirement is that civil liability (i.e., third party cover) is provided for in the vehicle insurance cover you hold.

More particularly, the EU directive on this matter defines “vehicle” as “any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled.”

Our Road Traffic Act, Sections 143 and 145, restrict the duty to take out third party motor insurance and the scope of cover to be provided by UK motor insurers to the “use of a motor vehicle on a road or other public place” and section 185 also restricts the definition of “motor vehicle” to a “mechanically propelled vehicle intended or adapted for use on the roads”.

This has meant that use of a non-road (in our case “race”)”vehicle” on private land, (a race track) has not required compulsory insurance cover.

damaged race car

There is a real chance that this state of affairs is heading the way of the dinosaurs – extinction!

A September 2015 ruling in the Court of Justice of the European Union (CJEU), Damijan Vnuk v Zavarovalnica Triglav C-162/13, found that compulsory motor insurance has to cover any accident caused by the use of a vehicle that is “consistent with the normal function” of that vehicle.

Read that last line again and see what it means to you, me and other race car drivers and track users.

Let me rephrase it – a road car on a private drive, a tractor in a farmers farmyard, a race car on a race track – all of these are vehicles in use consistent with their normal function on private land.

The CJEU highlighted the different approaches to the Directive currently adopted by the member states – some imposing the requirement of “road use”, some only “use” – and the importance of a consistent approach. The concept of “use” could not be left to the individual member states.

The CJEU considered the objectives of the EU legislation on compulsory insurance and in particular, the protection of victims of accidents. Bearing that in mind, they determined that “use of a vehicle” was intended to mean any use which was consistent with the normal function of the vehicle. The location where the vehicle is being used, whether on a road or elsewhere, does not affect the determination of whether a vehicle is being used.

This means that the Road Traffic Act 1988 is now inconsistent with EU law and must be changed to encompass this new ruling.

crashing race car

What does that mean to racers and track users? Today – nothing; tomorrow, well that is a very good question.

Without boring you all there is still plenty of manoeuvring to be done but the issue is sufficiently serious enough that the MSA’s General Secretary Simon Blunt is looking into the position for the UK and trying to minimise the effect that this ruling will have for fear that racers could be priced out of the sport by insurance premiums.

Some would say that compulsory insurance is the right thing for our sport since the consequences of an accident can be so great – others would suggest that every track user knows the risks before slipping behind the wheel. Whatever your personal feelings are the whole debate looks like it has been taken out of hands and put squarely into the lap of the legislators.

With thanks to the national law firm DWF.

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