AA welcomes move to simplify insurance legislation

5:00 am, July 1, 2015

AA Cars has welcomed the final simplification and little-noticed change of legislation concerning motor insurance certificates, brought about by the Deregulation Act, which came into force yesterday.

The Act is wide-ranging and is part of the government’s ‘red tape challenge” launched two years ago, aimed at cutting out bureaucratic procedures, including those affecting motor insurance.

The Act removes the requirement for a driver to be in possession of a motor insurance certificate to be able to legally drive a vehicle.

It had already removed the requirement for insurers to deliver a hard copy of the certificate to policyholders, allowing them be transmitted electronically.

Now, although insurance certificates must still be delivered to customers – either by post or electronically – there is no longer a need for a policyholder to actually have receipt of the certificate for the policy to be valid.

In practice, it will make little difference to the majority of drivers who opt to receive their certificates electronically, or renew their cover in good time.

However, the move is likely to simplify the used-car buying process, as most motor retailers insist on sight of a certificate to ensure the car is being legally driven away.

David Bruce, director of AA Cars, says: ‘Although there was no legal requirement for a used-car dealer to have sight of an insurance certificate, the majority of responsible dealers wouldn’t release a vehicle until they had seen it.

‘Such confirmation could now be provided by telephone, fax or email from an insurer, before the certificate is issued.

‘Drivers will welcome this relaxation in the process of buying a vehicle and provided they have arranged cover, which could even be carried out at the supplier’s premises, they can drive away knowing they are insured.’

In addition, the Act no longer requires insurers to recover certificates in the event of mid-term cancellation.

Bruce adds: ‘In effect, the Act removes some anomalies that smooth the whole motor insurance process, making it more straightforward for insurers, dealers and customers.’