UK Scraps EU Rule Allowing Uninsured Drivers Compensation

The UK government will scrap EU rules forcing law-abiding motorists to stump up for compensation claims made by uninsured drivers. Transport Secretary Heidi Alexander will use Brexit powers to repeal the Brussels regulations, returning to a "common-sense" approach. The move is part of the government's efforts to tackle criminal behavior and reduce the financial burden on law-abiding drivers.

Key Takeaways:

• The EU rule forces car insurance firms to pay into a pot, known as the fund of last resort, which pays out to drivers who have been hit by an uninsured or unidentified driver.
• The fund was originally not open to claims from uninsured drivers, but in 2017, ministers were warned that their exclusion was illegal under EU rules.
• Uninsured drivers who are either hit by another uninsured motorist or involved in a hit-and-run have been eligible for compensation since 2017.
• The money for the fund of last resort is raised by a levy on insurance firms, which pass the cost onto their customers in higher premiums.
• Plans to repeal the EU law were drawn up by the last Tory government, which launched a consultation before the general election.
• There was "overwhelming support" for changing the rules to demonstrate that "uninsured driving is unacceptable."
• The change will send a message that uninsured drivers should not benefit from being compensated by the fund of last resort for property damage.
• The Motor Insurers' Bureau has been working closely with ministers to reintroduce the exclusion.
• Uninsured drivers are not just breaking the law, but they make roads more dangerous and increase the cost of motor insurance for the honest majority.
• The change can be introduced quickly because it does not require new legislation.
• Heidi Alexander, the Transport Secretary, will restore this common-sense agreement because this Labour government is tackling criminal behavior and backing all road users to the hilt.