The law and short term car insurance
Common Confusion
Motorists are sometimes unclear about what they can do with short term or temporary insurance. These policies do not substitute for annual insurance, so motorists cannot use them in the same way. And though they protect one's no claims bonus on annual insurance, there are still repercussions to accidents.
Hired Vehicles
Temporary or short term cover may not be used to cover a hired vehicle. Many policies exclude them two ways, in their restrictions and in their detail of covered use. Taxis and private hire vehicles have different rules than do cars for social or recreational use. If a motorist uses temporary or short term insurance to cover a hired vehicle and they get into an accident, that accident will not be covered. Doing so defeats the purpose of purchasing short term cover, so motorists should make sure not to violate these rules.
Road Tax
Some insurers explicitly forbid motorists from using their certificate to purchase road tax. Others note that it is the decision of the post office as to whether or not to issue tax and specifically disclaim any influence or role in the decision. Motorists should read the policy requirements and restrictions for their insurers' view of this issue.
The fact is: you can, now, use downloaded documents to tax a car if they are accepted by the post office staff as genuine. You can also use a proper, hologrammed cover note: the companies we link to will send you one for a small extra charge of a few pounds and you can order one when you book your insurance.
Alternatively you can wait until the insurer has updated the Motor Insurer's Database (MID) then you can tax the car online or by telephone; updating the MID usually takes a few days. Strictly speaking you are only obliged to have the vehicle insured on the day that the new tax disc is due to come into force but it would be diplomatic to allow a little leeway.
Informing One's Annual Insurer
If a motorist gets into an accident that is covered by their temporary policy, it will not affect their no claims bonus on their annual policy. At the same time, annual policies state that they must be informed of material facts affecting their decision to cover motorists. A claim on a short term or temporary policy is material to this decision, so it needs to be disclosed to the annual insurer. Failure to do so may invalidate the annual policy.
Most insurers have faced all of these questions and more. If motorists are unclear about what they can do with temporary or short term cover, they should first consult their policy documents and then contact the insurer.
Insurance and the Law
The law governing car insurance is the Road Traffic Act 1988. It requires at least third party cover for all motorists on public roads. It also makes an offence of permitting another to use a vehicle without proper insurance.
Road Traffic Act 1988
The Road Traffic Act 1988 states, "a person must not use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act." The notable part of this wording is the section about using a vehicle in a public place other than a road.
Some legal experts have called this a deliberately wide definition. People sitting in parked cars could be penalised on the spot, even if they're not driving. It also poses the question of how to define use of a vehicle. Such broad wording allows police to levy more penalties, so motorists need to take care.
Permitting Others to Drive Uninsured
The same Act also states, "a person must not cause or permit any other person to use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that other person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act."
Take a situation where a motorist is driving on holiday and allows a companion to drive for a time. If that companion turns out to be uninsured, even unknowingly, the motorist would be in violation of the law.
The same is true of companies that operate fleet vehicles. Employers may be prosecuted if their employees drive without insurance. Parents who allow their children to drive uninsured, even if they believe they are insured, can also be prosecuted.
Penalties
Prosecutions for a lack of insurance may take place in a Magistrates' Court. It's often difficult to defend against such prosecution because it's considered an absolute offence. If guilty, motorists may face fines up to £5,000, 6 to 8 penalty points on their licence, and may possibly have their licence revoked.
When courts mull the penalty, their biggest consideration is intent on whether a motorist wilfully drove uninsured or if it was unknowing. Obviously this is the worst case scenario, but it is possible. Motorists should make sure to avoid it by always keeping sufficient cover when using a vehicle. Given the ease of purchasing short term cover online, motorists have no excuse.