Motor Insurance Directive (MID)

The Directive amending the Motor Insurance Directive (MID) was published in the Official Journal of the EU in December 2021. EU Member States must have applied its provisions by the end of 2022.

The main changes agreed upon by the EU co-legislators are the following:

  • Motor insurance price comparison tools: Member States may choose to certify tools which enable consumers, free of charge, to compare prices, tariffs and coverage between providers of motor third party liability insurance which comply with the conditions set out in MID. If duly certified, such tools can be denominated as “motor insurance independent price comparison tools”. Member States may also establish public price comparison tools, run by a public authority.
    BIPAR was not in favour of introducing a reference in the MID to only one type of insurance distributor (comparison tools), as this could trigger competition issues and create an unlevel playing field in the intermediation sector. Together with its members, BIPAR will monitor the implementation of this provision carefully.
  • Definition of “vehicle”:“(a) Any motor vehicle propelled exclusively by mechanical power on land but not running on rails with a maximum design speed of more than 25 km/h, or a maximum net weight of more than 25 kg and a maximum design speed of more than 14 km/h; (b) any trailer to be used with a vehicle referred to in point a), whether coupled or un-coupled”.
  • Definition of “use of vehicle”: “any use of a vehicle that is consistent with the vehicle's function as a means of transport at the time of the accident, irrespective of the vehicle's characteristics and irrespective of the terrain on which the motor vehicle is used and whether it is stationary or in motion”.
  • Light electric vehicles and motorsport vehicles are excluded from the obligation to obtain insurance cover.
  • Vehicles used exclusively on areas with restricted access: Member States may make limited derogations from the obligation to obtain insurance cover in respect of restricted areas to which unauthorised persons should not enter.
  • Compensation in case of insolvency of insurance undertaking: Member States shall set up bodies to ensure that, if the insurance undertaking of a vehicle responsible for an accident is insolvent, injured parties can be compensated in their Member State of residence, even when they are injured as a result of an accident occurring in another Member State. This applies from the moment when the insurer is subject to bankruptcy or winding-up proceedings.
  • Claims-history statement: the content and format of the claims-history statement is harmonised (6 mandatory items of information). Insurance undertakings shall treat a statement from another Member State as equal to a domestic statement and apply any discounts available to an otherwise identical potential client.

EU Court of Justice on the insurance obligation - Meaning of vehicle

The Court of Justice of the EU (C-383/19) held on 29 April 2021 that the conclusion of a contract of insurance against civil liability in respect of the use of a motor vehicle is compulsory where the vehicle concerned is registered in a Member State, as long as that vehicle has not been officially withdrawn from use in accordance with the applicable national rules.

In this case, this conclusion found to apply to a vehicle registered in a Member State which was on private land and which was intended to be destroyed in accordance with the choice of its owner, and even though that vehicle was not, at a given time, capable of being driven due to its poor technical state. While Member States have the option to derogate from the obligation to obtain insurance cover “for certain natural or legal persons, public or private, or, for certain types of vehicle or certain vehicles having a special plate”, the Member State at issue in this case had not exercised that option in respect of vehicles acquired by local government authorities. Since this vehicle had not been officially withdrawn from use it did not cease to be subject to the insurance obligation.