ACFO advise now is the time to check continuous insurance compliance
The Association of Car Fleet Operators (ACFO) are advising all organisations to check now that any vehicles used on business trips, including grey fleet cars, are listed on the Motor Insurers’ Bureau (MIB) database before the introduction on June 20 of enforcement of the new Continuous Insurance Enforcement law.
Under the new legislation, aimed at mainly the private motorist market, but with implications for fleets as well, which forms part of the Government’s crackdown on uninsured drivers, it will be an offence to keep an uninsured vehicle, in addition to the offence of driving when uninsured. This means vehicles must be kept insured unless the DVLA has received notification that they are being kept off the road and has issued a Statutory Off Road Notice (SORN).
It is estimated that around 1.4 million drivers on Britain’s roads are uninsured costing every responsible motorist an average additional £30 on their premiums to cover accidents involving uninsured and untraced drivers, says the Department for Transport. It is also estimated that these drivers are responsible for 160 deaths and 23,000 injuries on our roads annually.
Potential traps
ACFO director Stewart Whyte said: “In general fleet operators have a good record for having insurance in place. However, there are some potential traps for fleets – and an early review, plus on-going attention, is vital to avoid possible prosecution.”
The law change reinforces the fact that the onus is on the policy holder of a vehicle to ensure that it is insured and is listed on the Motor Insurance Database (MID).
Mr Whyte said: “Now is the right time for fleet operators to check that all their vehicles are properly entered on the database. There is some anecdotal evidence that leasing companies that have carried out audits of clients’ vehicles have found that some units were not listed on the MID. While this is almost certainly due to administrative oversight, it could still fall foul of the latest regulations.
“It is the responsibility of the insurance policy-holder to ensure that the details of every vehicle covered by the policy (or multiple policies in some cases) are recorded on the MID.
“Many fleets outsource this task to their leasing/fleet management service provider or insurance broker for sound administrative reasons, but under the new law the buck stops with the policy-holder.
“Fleet operators should undertake internally or via their outsourcing partner a check that all current vehicles used/owned by the business are recorded accurately with care over detailed input of the registration number on the MID. They should also ensure that the system to keep the record accurate and up to date in future is robust. Special areas for attention are rental vehicles and demonstrators which can often be overlooked, but which are still the fleet operators/ policy-holders responsibility.”
Escalating penalties
The MID will be checked against the DVLA taxed vehicles database. The registered keepers of any taxed but uninsured vehicles will receive ‘advisory letters’ outlining the actions they need to take to avoid enforcement action, which begin with a series of escalating penalties, starting with a £100 fixed penalty notice (£50 if paid within 14 days of issue) and progressing to vehicle clamping, seizure and disposal and a potential court prosecution with a fine of up to £1,000.
Leasing companies which receive these ‘advisory letters’ will pay the fine and recharge it to customers and invariably add on an administration charge.
Mr Whyte said: “ACFO believes that the dangers of a company car being seized and crushed are – or should be – extremely low. However this is still a potential threat and justifies careful attention to avoid possible prosecution.”
Employers that allow staff to drive their own cars on business trips, the grey fleet, are being advised by ACFO to remind their employees about the new rules.
Mr Whyte said: “The need to check legislative compliance is part of good grey fleet management, and, of course, where the company is supporting employees through a structured scheme of employee ownership, the financial aspects and risks to the business also need to be considered.
“Although there are checks and balances in the system to help common sense prevail, a simple error or omission on the clerical side could increase the risk; and generate a lot of needless administration work to salvage. That is why it makes good business sense to check the systems now – and save time and trouble in the future.”
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