Changes to the EU Motor Insurance Directive have been proposed that could shake up the car insurance industry across the continent. From car insurance history being shared across Europe to new powers that will target uninsured drivers, here’s everything that you need to know about the proposal.

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If the new rules are approved they will apply to all countries within the EU and will aim to provide greater protection for consumers as well as bringing greater standardisation to the industry.

When introducing the new proposed rules, Jyrki Katainen, who is the European Commission’s vice-president for jobs, growth, investment and competitiveness, said that the new Directive had been put together to help the insurance industry function better and “for the benefit of drivers and potential victims of motor vehicle accidents.”

Under the new rules, if they are adopted:

  • Insurance claims will still be paid out in full, even if the insurance provider has become insolvent (although this is already in place in the UK).
  • Claims history will be shared by all countries within the EU so that insurance premiums can be adjusted accordingly. Any no claims discount could also now be taken into account and motorists moving to a new EU country could potentially benefit from lower premiums.
  • EU countries will have greater power to combat uninsured drivers. At present it is prohibited to use automatic number plate recognition (ANPR) systems on vehicles from other EU countries, as this is seen as a hindrance to free movement. The proposed changes will allow ANPR systems to be used to check whether a vehicle from any EU country is properly insured.
  • Standardised minimum levels of cover will be rolled out across the EU, whereas at present there are different levels of cover offered in each member country.

Some of these changes have been welcomed by the UK insurance industry. However, the British Insurance Brokers’ Association (BIBA) have expressed some concern over certain elements, such as shared insurance history as they feel that this could pose significant administrative difficulties that could cause increased costs.

The first EU Directive concerning car insurance was adopted back in 1972 in order to offer protection to victims of motor accidents and to help facilitate the free movement of vehicles between EU member countries. There have been subsequent amendments since then and in 2009 they were all amended into the “EU Motor Insurance Directive”.

In 2016 the EU Commission began a review of the existing Directive and launched a public consultation in 2017. These proposed changes are as a result of the evaluation of the Directive and take into account the results from the public’s views.