Car Insurance Law in the UK

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Car insurance law originated in 1930 when legislation was brought in requiring every person using a vehicle on the road in the UK, or permitting others to use that vehicle to have a motor insurance policy. At the very least this needs to be a third party personal injury policy.

The important word is "user". Legislation since 1930 has referred to the "users" of vehicles. The 1988 Road Traffic Act contains "user" seven times. The reason this is important is that the user is not necessarily the driver of the vehicle. Elliot V Grey (1960) indicated that your policy will indemnify the 'user' not the 'driver' as it says that you must be insured "to have the use of a motor vehicle on the road".

The most important legal document in car insurance is the certificate of insurance. Insurance is not in force until the certificate has been delivered to the insured person. You can't drive a vehicle unless you have a valid certificate in your possession. It is a criminal offence not to have one.

As far as the Road Traffic Act liability is concerned, certain restrictions in a policy may be inoperative once a certificate is delivered. The age or physical or mental condition of the driver, the condition of the vehicle and the number of people carried are restricted. Should the person insured be of worse risk than the insurer anticipated, it cannot escape responsibility. This is designed to protect innocent victims of accidents.

Before you receive your certificate of insurance, you should at least have a cover note. Remember also that a certificate merely proves you are insured, your actual policy will provide the details.

What the certificate should contain is the name of the policyholder, the registration mark of the vehicle, the date of cover commencement, the expiry date, the limitations of use and the persons or person classes entitled to drive the vehicle.

The courts have a wide interpretation of what or who is the 'user' of the car. There are many criminal cases about this and there are also some rules regarding what happens to a victim should the vehicle user have no insurance. Should the culprit be uninsured or untraced, the government set up the Motor Insurers Bureau (MIB) to compensate injured victims of motor accidents. This is funded by a levy on car insurance premiums.

Ultimately, the law tries to make sure insurers pay up, so the MIB isn't needed. Two examples are 'Scarsbrook & Others V Mason' (1961) where a passenger in a stolen vehicle becomes a vehicle 'user'. 'Monk v Warbey' (1935) held a vehicle owner liable for a crash involving an uninsured driver of his car.

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