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European insurers: No way we’ll insure motorsports activity

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Photo by Lav Ulv.

Motorsports fans in Europe have lost another battle in their bid to save the sport from a revised Motor Insurance Directive after insurers there stated they will not cover any racing activities, despite claims to the contrary from the European Commission.

In its formal proposal to amend the Directive, triggered by a trio of EU court rulings going back as far as 2014, the Commission acknowledged the concerns motorsports enthusiasts across Europe have expressed regarding mandatory insurance for all motorized vehicles regardless of use and claimed that obtaining insurance for racing will not be a problem.

“Indeed, certain Member States already impose a motor third party liability insurance requirement in line with the case law, without excessively high insurance premiums, including for motor sports events,” the Commission wrote in its proposal dated May 24.

According to the UK-based Motorsport Industry Association, those “certain Member States” the Commission referred to, France and Finland, currently explicitly exempt motorsports activities from insurance requirements. However, the scope of the proposed Motorsport Insurance Directive – which encompasses “the normal use of a vehicle for the purpose of transportation, including its use on private properties” – stands to wipe those exemptions out entirely.

The French Fédération Francaise de l’ Assurance (FFA) has made clear to us that the Civil Liability law in France excludes vehicle-to-vehicle damage caused during any sporting event due to their “Acceptance of Risks” rule. Their current legislation is not complying with the interpretation of the Directive…
We know from the National Sporting Authority (NSA) in Finland, their legislation states that no third-party insurance is compulsory when vehicles are driving in an ‘enclosed’ area. So again, their current legislation does not comply with the interpretation of the Directive.

In addition, the MIA reported that the European insurers it spoke with either wouldn’t or wouldn’t be able to cover any sort of motorsport activity should the EU pass the Directive without a motorsports exemption.

Insurance Market specialists, who underwrite the majority of insurance to motorsport organisers across the EU confirm that no effective market can, or will, write insurance to meet the Directive-specified levels of liability which demands cover for both property damage (e.g. vehicle-to-vehicle) and personal injury to fellow motorsport competitors.

As the Insurance Market motorsport specialists have confirmed that they will not write insurance which meets the Directive-specified levels of liability for motorsport, no compliant insurance will be available in the EU, so no motorsport, at any level of any nature, can continue.

According to the MIA, the motorsports industry in the United Kingdom alone employs 50,000 people and generates £11 billion in economic activity. Motorsports insurance is already nigh impossible to find in Europe.

In September 2014, the European Court of Justice ruled in favor of a Slovenian farmer in Vnuk v. Triglav and in the process found that the EU’s 2009 Motor Insurance Directive did not clearly distinguish between on-road and off-road use – partly as a result of inadequate translations – and therefore, any motor vehicle, regardless of its use on public or private property, must be insured.

That ruling has since been upheld a number of times as the EU and the UK (which remains subject to the EU’s laws until it officially separates from the EU) have considered how and whether to revise their auto insurance laws. With its formal proposal to amend the Motor Insurance Directive earlier this year, the European Commission effectively sided with the European Court of Justice by requiring all motorized vehicles – even those in competition – to carry insurance.

Ahead of a Tuesday deadline to submit comments on a review of the proposed changes, the MIA has suggested to the Commission that it either revise the proposed directive revisions to apply only to vehicles in traffic or that it carve out a specific and explicit exemption for vehicles used in motorsports.

Observers have estimated the formal process for amending the Motor Insurance Directive could take as long as a year and a half.