Motor insurers in the UK have voted to mutualise the risks associated with terrorism claims, electing that The Motor Insurance Bureau (MIB), the UK’s not-for-profit body, handle and pay the claims from victims involved in a terrorist event where a vehicle is used to kill or injure.
All motor insurers writing business in the UK are members of MIB, which deals with the claims from victims involved in uninsured and ‘hit and run’ accidents, and which is funded through a levy arrangement.
The vote was passed by a majority of 75% and will see MIB directly handle the compensation for victims of vehicle-related terror events that take place on or after 1 January 2019.
MIB said that it intends to explore the possibility of reinsuring some of the liability to reduce its exposure to terrorist incidents.
Dominic Clayden, Chief Executive at MIB, said: “Those who are innocently caught up in events where terrorists drive vehicles into people to injure and kill, can rely on MIB to pay and handle their motor related claims for these terrible events.”
Steve Maddock, Chairman of MIB and Chief Operating Officer at Direct Line Group, added: “The motor insurance market has clearly signalled that it was right to consider if individual insurers or the market as a whole carry the risks associated with motor claims arising from terrorist attacks.
“The outcome of the vote indicates strong support to mutualise the risk and enable MIB to act in the event there are further terrorist activities. It is a good outcome for the industry and the public and one which is supported by the Department of Transport.”
Following the vote, Article 75, the relevant element within MIB’s Articles of Association, has been changed to bring the new liabilities within the scope of claims paid by the Bureau.
