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Fleets warned of potential pitfalls from new insurance law

By / 6 years ago / Latest News / No Comments

The advice comes from ACFO, less than one month before the introduction on 20 June of enforcement of the new Continuous Insurance Enforcement law. 

Under the new legislation, which forms part of the Government's crackdown on uninsured drivers, it will be an offence to keep an uninsured vehicle, in addition to the offence of driving when uninsured. As a result all vehicles must be kept insured unless the DVLA has received notification that they are being kept off the road and has issued a Statutory Off Road Notice (SORN). Otherwise, the DVLA, will issue an "advisory letter" directly initially to the registered keeper. Failure to act quickly will rapidly escalate to a penalty notice and fine. 

Leasing companies that receive these advisory letters will pay the fine and recharge it to customers and invariably add on an administration charge.

ACFO says that fleet operators have a "window of opportunity" until 20 June to review their insurance administrative procedures ahead of the law change.

ACFO director Stewart Whyte said: 'Now is the right time for fleet operators to check that all their vehicles are properly entered on the database. There is some anecdotal evidence that leasing companies that have carried out audits of clients' vehicles have found that some units were not listed on the MID. While this is almost certainly due to administrative oversight, it could still fall foul of the latest regulations.

'It is the responsibility of the insurance policy-holder to ensure that the details of every vehicle covered by the policy (or multiple policies in some cases) are recorded on the MID.

'Many fleets outsource this task to their leasing/fleet management service provider or insurance broker for sound administrative reasons, but under the new law the buck stops with the policy-holder.'

Employers that allow staff to drive their own cars on business trips are also being advised by ACFO to remind their employees about the new rules.

Whyte said: 'The need to check legislative compliance is part of good grey fleet management, and, of course, where the company is supporting employees through a structured scheme of employee ownership, the financial aspects and risks to the business also need to be considered.

'Although there are checks and balances in the system to help common sense prevail, a simple error or omission on the clerical side could increase the risk; and generate a lot of needless administration work to salvage. That is why it makes good business sense to check the systems now – and save time and trouble in the future.'

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