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Insurance law change to impact on fleets and leasing companies

By / 11 years ago / Latest News / No Comments

The Government has announced that from late spring – an official date has yet to be revealed – it will be an offence to keep an uninsured vehicle, rather than just to drive when uninsured. As a result, the onus is on the "registered keeper" of a vehicle to ensure that it is insured at all times unless the DVLA has received notification that they are being kept off the road.

When the new law comes into effect, owners of uninsured vehicles will receive a letter telling them that their vehicle appears to be uninsured and warning them that they will be fined unless they take action. If the registered keeper fails to insure the vehicle they will be given a £100 fine. If the vehicle remains uninsured – regardless of whether the fine is paid – it could then be seized and destroyed.

The new legislation will add to the administration for fleets that purchase their vehicles outright, says fleet software company Jaama, and will also mean that organisations that lease vehicles must inform their suppliers of every change relating to insurance documentation.

Historically, organisations have signed a "master hire" agreement with their contract hire and leasing vehicle provider that includes a commitment to insure. However when the new legislation comes into place, contract hire and leasing companies will be responsible for ensuring that customers have correctly insured all vehicles.

Jaama managing director Jason Francis explained: 'When the authorities run checks on vehicles and discover that a leased vehicle is uninsured it will be the contract hire company that is targeted.'

He added: 'As a provider of software to a number of the UK's leading contract hire and leasing companies we are actively helping them to update their internal administration processes. The onus is now on vehicle providers to ask their fleet customers to inform them every time there is the slightest policy insurance change.'

Jaama's Key2 Vehicle Management software has a module that enables contract hire and leasing companies to maintain customers' vehicle insurance details.

'Leasing companies should now be collecting policy insurance details from their customers and uploading them on to their vehicle management systems, which for some could prove to be an administrative burden as it is an issue they have not faced before,' added Francis.

Additionally, fleet managers, said Francis, needed to be educated to provide their insurance policy documentation to their leasing company provider.

Fleets that acquire vehicle on outright purchase are already the "registered keeper" of vehicles and therefore will not face the same administrative burden. However, Francis advises that they should ensure that current insurance documentation is on the Motor Insurance Database (MID), which is managed by the Motor Insurers' Bureau (MIB).

'With regards to companies that purchase their vehicles, insurance information should be sent by their policy provider or broker, but the onus is on the business to prove that vehicles are insured,' said Francis. 'Our Key2 system enables insurance data to be instantly updated and a file uploaded direct to the MIB every time a change is made following the acquisition or defleeting of a vehicle.

'This process removes at a stroke the need for businesses to contact the MIB directly or manually enter details via the MIB website.

'The authorities have said that the MID will be systematically checked so that the levels of uninsured driving are reduced even further. Therefore, it is vital that leasing companies and all fleets have the administration processes in place to ensure they remain on the right side of the new law when it comes into force.'

The MIB in conjunction with the DVLA and British Insurance Brokers' Association (BIBA) are also reminding all vehicle owners of the law change.

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