European Commission proposes new Motor Insurance Directive, June 2002

The European Commission presented a proposal on 10 June 2002 for a new motor insurance Directive aimed at modernising and improving the existing EU rules in this area.

The key provisions would allow for people to find car insurance for a temporary stay in other Member States, get short term insurance covering cars bought outside the owner's Member State of residency, increase the protection for pedestrians and cyclists involved in traffic accidents and allow motorists to obtain a staement relating to their claims record from their insurer.

The proposed fifth motor insurance Directive would update the previous four which have helped to make the free movement of motorists and vehicles in the Union a reality. Not only do some of the aspects of those Directives, adopted in the 1970s and 1980s, such as the minimum amount of cover need to be updated but there also several gaps which need to be filled.

The proposal follows a call from the European Parliament in July 2001 for an update to motor insurance rules. An expert group was established by the European Commission and carried out extensive work, including consultation with interested parties from the motor industry and accident victims' associations.

Speaking about the proposal, Frits Bolkestein, the European Commissioner responsible for the internal market said,

'The aim of this proposal is to make life easier for motorists travelling within the EU, by addressing a number of problems which they frequently encounter today. European citizens have the right to use, buy and sell their vehicles in other Member States. So we need a system that makes it as easy as possible to get insurance cover, for whatever circumstances may arise. That cover needs to be effective across borders. This proposal is the Commission's response to the questions, comments and complaints we have received from citizens and from members of the European Parliament on the operation of the existing Motor Insurance Directives, at a time when cross-border traffic has grown immensely'.

The Association of British Insurers (ABI) welcomed the proposals. Jo Dagustun, the ABI's Motor Manager said,

Many of the proposals will be good news for UK motorists. We are pleased to see the Commission's determination to resolve the difficulties experienced by motorists trying to insure a car bought in Europe for their journey back to the UK. We also welcome the Commission's intention of making it easier for people to arrange motor insurance while temporarily living in another EU State. It is also good to see measures aimed at encouraging motorists to shop around for their motor insurance.

The proposals, if approved, are likely to benefit all Europeans motorists and would certainly improve the functioning of the internal market for motor insurance.

Links:

European Commission:

• 10.06.02: Press Release: European Commission proposes to modernise and improve EU rules on motor insurance [IP/02/838]
• European Commission: DG Internal Market: Proposal for a Directive amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC, 90/232/EEC and Directive 2000/26/EC on insurance against civil liability in respect of the use of motor vehicles [COM(2002)244 final]
• 10.06.02: Proposal to modernise Fifth Motor Insurance Directive - Frequently Asked Questions [MEMO/02/133]

European Sources Online: Financial Times:

• 11.06.02: EU wants better deal for road victims

BBC News Online:

• 10.06.02: EU proposes car insurance shake-up

The Association of British Insurers:

• 10.06.02: Press Release: ABI welcomes 5th Motor Directive proposals

Helen Bower
Compiled: Tuesday, 11 June 2002

The European Commission presented a proposal on 10 June 2002 for a new motor insurance Directive aimed at modernising and improving the existing EU rules in this area.