Driving Abroad and Motor Insurance Cover Documentation in the Event of a “No Deal” Brexit

While UK Parliamentary decisions are being made there are still three potential outcomes when it comes to Britain leaving the European Union (EU): A deal, no deal, and no Brexit. Although the state of play may change, as long as there is potential for a no deal Brexit, organisations should continue to plan on this basis.

In light of the current uncertainty over the UK’s exit from the EU, the UK government and market associations are increasingly issuing additional “no deal” impact papers to assist with those preparations.

In January this year the Association of British Insurers (ABI) and Motor Insurance Bureau (MIB) both issued guidance advising UK motorists (private and fleet owned) to contact their insurers to apply for a Green Card in advance of any European travel. A Green Card is an EEA certification of insurance which provides motorists with evidence of the minimum level of compulsory motor insurance required by the law of the EEA country in which travel will take place.

Why is a Green Card necessary?

Currently, as a member of the European Union (EU), a UK motorist is not required to show any additional proof of motor insurance (such as a Green Card) when travelling within the Green Card-free circulation area. This area comprises the European Economic Area (EEA), and Andorra, Serbia and Switzerland.

Whilst an agreement between the UK and the relevant European insurance authorities was made in May 2018 waiving the need for Green Cards in the event of a “no-deal” Brexit, to date this agreement has not been ratified by the European Commission.

At present the advice to consumers and businesses is to plan on the basis of Green Cards being required after 31 October 2019. After this date UK motorists driving all classes of vehicles, both privately owned and those within a company’s fleet will need to carry a Green Card as proof of third-party motor insurance cover. Some countries also require separate insurance for trailers, so a separate Green Card may also be required for a trailer. A physical copy of a Green Card will be necessary when travelling in Europe as digital copies are not currently accepted. Green Cards need to be applied for at least a month before travel, so it is important to ensure that any applications are made promptly as we move towards the UK’s departure from the EU in its current form.

Failure to comply with the requirement to have a Green Card could lead to severe consequences. If drivers do not carry a Green Card their vehicle could be seized, they could face a fine and/or the risk of prosecution.

Obtaining a Green Card

Each insurer is obliged to provide a Green Card when requested by their policyholders and many insurers have now released their own guidance in relation to Green Cards. There may be a cost associated with the issuance of a Green Card, and this will vary between insurers. In view of the timing of the application process and the possible consequences of failure to carry a Green Card, consumers and businesses are advised to contact their insurers as far in advance of the intended trip as possible to ensure the Green Card is obtained and received in time. The insurer will advise the period of validity of each Green Card.

Are there any additional requirements?

Given the current uncertainty over the terms of the UK’s exit from the EU it is important to monitor guidance issued from the Government and insurance bodies as a number of requirements (including international driving licences or permits, vehicle identification etc.) for driving abroad may change, depending upon the terms of the UK’s departure from the EU.

If you have any queries about any of the issues discussed in this blog please do not hesitate to get in contact with your usual Marsh contact.

Further useful references

https://www.gov.uk/guidance/prepare-to-drive-in-the-eu-after-brexit

https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/motor-insurance/travelling-to-the-eu-if-a-no-deal-brexit/?p=2