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European Parliament takes first step to exempt motorsports, museum cars from insurance requirement

Published in blog.hemmings.com

Photo by Johann Schwarz.

Legislation that aims to protect European motorsports from potentially devastating mandated insurance requirements passed the first, and perhaps most crucial, of a series of votes earlier this week.

“Today, we found a good balance between greater protection for victims of accidents and preventing absurd overregulation,” Rapporteur Dita Charanzova said in a press release announcing the European Parliament’s Internal Market Committee’s Tuesday vote to exempt motorsports — along with e-bikes, electric scooters, and other forms of transportation not normally used in traffic — from the European Union’s Motor Insurance Directive.

According to Charanzoca, the committee decided to exempt vehicles used exclusively for motorsports activities because they “are generally covered by other forms of liability insurance and are not subject to compulsory motor insurance when they are solely used for a competition.”

The threat of compulsory insurance requirements for race cars in Europe has loomed since the 2014 European Court of High Justice ruling in the Vnuk case, in which the court decided that all forms of motorized transport, on both public and private property, were subject to compulsory insurance. In part, that ruling stemmed from the 2009 EU Motor Insurance Directive’s failure to include the clarifying phrase “in traffic” when defining the normal use of a vehicle.

In the years since, European motorsports enthusiasts and backers have denounced the Vnuk ruling — and the European Commission’s intentions to codify that ruling in EU law — noting that it essentially outlaws motorsport activity across the EU, albeit unintentionally, largely due to the fact that European insurers have stated that they would not cover any sort of motorsport activity without an exemption to the MID.

“If implemented, the Vnuk judgment would wipe out all legal motor and motorcycle sport activity,” the Motorcycle Industry Association wrote in 2017.

Jesse Norman, the recently appointed Minister of State for the United Kingdom’s Department of Transport, echoed those comments earlier this month on the floor of Parliament, noting that the MID, if not amended, “has the potential to shut down U.K. and European motorsport industries.” In the U.K. alone, the motorsport industry generates £11 billion in revenue every year, according to the Motorsport Industry Association.

The Internal Market Committee’s amendments help avert that fate, specifically by re-inserting the phrase “in traffic” and by introducing a motorsports exemption. The committee did leave it up to EU member states to determine whether they should make compulsory insurance mandatory for motorsports activities within their countries.

In addition, the committee introduced an amendment aimed at negating the need for insurance for “vehicles which are registered but incapable of being moved because they are in a museum, because they are undergoing restoration or because they are not being used for a lengthy period of time.” According to the wording of the amendment, disconnecting a battery cable is sufficient enough to disable a vehicle for these purposes.

The amended MID passed the committee by a 34-1 vote. The amendments will now go to the full parliament for a vote, expected to take place sometime next month; the European Council will then have to agree to the amendments before they become law.