Motor insurers writing business in the UK have voted to mutualise risks for terrorist attacks where vehicles are used to kill or injure.
The decision by the Motor Insurers Bureau (MIB), the UK’s not-for-profit body dealing with the claims from victims involved in uninsured and ‘hit and run’ accidents, follows a ballot of motor insurers. More than 75% of motor insurers agreed to the change.
Article 75 of the MIB’s Articles of Association have now changed to bring vehicle-related terrorist events within the scope of claims the Bureau pays. Compensation for victims of such events taking place after 1 January 2019 will now be handled by the MIB.
The MIB, which will continue to be funded by a levy, added it will explore the possibility of reinsuring some of the liability.
Several terrorist attacks that occurred in 2017 involved vehicles including those in Westminster, London Bridge and Finsbury Park.
“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,” said Steve Maddock, chairman of MIB and chief operating officer at Direct Line Group.
“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.”
The International Underwriting Association (IUA) supported the decision and added members of its casualty treaty group had raised concerns on vehicle-related terrorist attacks earlier this year.
“The mutualisation of motor terrorism risks promises an effective answer to a market problem that IUA members have been concerned about for some time,” said Chris Jones, director of legal and market services at the IUA.