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Road Traffic Act amendment laid before Parliament


Any declarations where the insurer seeks to downgrade to Article 75 Insurer must be obtained by 31 October 2019 otherwise the ability to downgrade to Article 75 Insurer on the grounds that the policy was obtained by misrepresentation will be lost.

The Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019 has now been laid before Parliament which amends s152 of the Road Traffic Act (the Act) and will come into effect on 1 November 2019.

This removes the ability of motor insurers to seek declarations under s152 of the Act after an accident and the potential benefits which come with that.

What does this mean for insurers?

For declarations to be effective in respect of existing claims where a policy has been avoided or insurers seek to avoid the policy, insurers must obtain a declaration before 31 October 2019 to downgrade to Article 75 insurer.

The insurer will not have any duty under the Act to meet third parties claims where a declaration is made by the court before the accident date.

Any existing declarations will be unaffected by the change, and there will be no retrospective impact.

Why is this changing?

The changes are being made because the Government has accepted that the Act does not comply with European law and they are being implemented to make English law consistent with the European Motor Insurance Directives. These changes will go ahead regardless of what happens with Brexit.

Benefits to obtaining declarations for insurers

  1. There is no duty to pay third party claims for losses which are insured, including subrogated claims;
  2. There is no duty to pay claims where there is a higher ranking insurer covering the vehicle i.e. a contractual insurer or a RTA Insurer;
  3. There is no duty to pay claims by passengers travelling in the “insured vehicle” where that person knew or had reason to believe that the vehicle was being used without insurance;
  4. The insurer is able to require the claimant to direct his/her claim to any other party liable for their injuries and/or loss under the ‘rule of meaningful degree’.

Time is of the essence

Insurers are advised to prioritise and check claims where they have avoided policies for misrepresentation pursuant to the Consumer Insurance (Disclosure and Representations) Act 2012 or Part 2 of the Insurance Act 2015 and take steps to obtain the declaration by 31 October 2019.

Keoghs have a specialist team to deal with such instructions and expedite these should insurers require assistance.

For further information please contact, Laila Visvanathan, Property Risks & Coverage Team



Laila Visvanathan

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