The period of lockdown has prompted some car enthusiasts to consider the different angles and options they have for their cherished vehicle or car collection. We all understand that in normal times, we must comply with the law in relation to MOT's, Road Tax and Insurance, but how has the current situation affected these areas?
The government was quick to deal with MOT's. If your vehicle MOT expires, on or after 30th March 2020, the expiry date has been extended by 6 months. Your vehicle must still be in a road worthy condition and comply with all relevant legislation. This allows you to Tax your vehicle provided there is a valid insurance policy noted on the Motor Insurers Database. However, some may decide to reduce insurance cover to “Laid Up” and SORN their vehicle. This will save the cost of the Road Tax, but as the vehicle will be “off the road”, you may also consider your motor insurance arrangements.
Most people take out Comprehensive Motor Insurance, which covers Third Party Legal Liability (Statutory Legal Requirements) and covers Accidental Damage, Fire and Theft of the vehicle and with a SORN vehicle, you have the option to reduce to Laid Up Insurance cover. However, you need to understand the cover you are buying as insurers provide different levels of cover within the general term of Laid Up.
What is common across all Laid Up Insurance policies is the removal of all Third Party Liability protection. If your vehicle causes injury or damage to a third party, your insurer will not protect you for any legal liability claim that may follow. This is not just in relation to any legal fees to defend the action, but includes any compensation award that follows. If the vehicle is driven where you do not need to comply with the law, you can still cause injury or damage to a third party. Remember, friends are third parties. You are on your own unless you have cover elsewhere
Some Laid Up Insurance policies only provide Fire and Theft cover to the insured vehicle. This is the most limited form of cover which can still leave your vehicle unprotected if damaged by a cause other than through a fire or being stolen. What happens if there is a flood or an accident that damages the vehicle? A burst pipe in the garage causing damage? Or hailstones if the vehicle is stored in the open? If you choose to reduce your insurance cover to Laid Up, make certain you know what is insured, and perhaps more importantly, what is not insured.
At Lockton, our Laid Up cover only removes the Third Party Liability section so the remainder of the policy remains in force and provides the same level of cover as previously enjoyed. You still do not have any protection for legal liability claims against you from a third party, so do think carefully before reducing your level of cover.
You must also remember to insure the vehicle on a Comprehensive basis if you subsequently need to travel to a garage to obtain and MOT. The law allows you to travel to a garage for a pre booked MOT, but you still need to have insurance in place to protect you and your vehicle should an accident occur on route.
Make sure to call your advisor to discuss any specific issues you may have surrounding your policy. At Lockton, we're here to talk you through it.