# The Motor Vehicles (Compulsory Insurance) Regulations 1987, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations implement the Second Council Directive 84/5/EEC of 30th December 1983 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles (“the Council Directive”).
Regulations 2 to 4 make amendments to Part VI of the Road Traffic Act 1972 (“the 1972 Act”).
Regulation 2 amends section 145 of the 1972 Act (requirements for policies of insurance) so that, to comply with Part VI of the 1972 Act, a policy must provide insurance against damage to property caused by or arising out of the use of the vehicle as well as insurance against liability in respect of death or bodily injury. Certain exemptions from insurance against liability for property damage are given; in particular a policy is not required to provide insurance for more than £250,000 in respect of damage to property arising out of any one accident. Regulation 4, by amendment of section 158 of the 1972 Act, provides that an accident includes two or more causally related accidents.
Regulation 3 makes amendments to section 149 of the 1972 Act (which makes provision for insurers to satisfy judgments). The principal new provisions are as follows:
(1) An insurer is bound to satisfy a judgment which relates to a liability required to be covered by a policy under section 145 of the 1972 Act even if the judgment is obtained against a person not insured by the policy, subject to certain exceptions in the case of vehicles stolen or unlawfully taken (the new subsections (1A)(b) and (1C)). In these circumstances the insurer issuing the policy has rights of recovery against the user or an insured person who caused or permitted the use of the vehicle (the new subsection (4B)).
(2) For the purpose of the requirement of an insurer to satisfy a judgment, any provision in the policy which restricts the insurance by reference to the holding of a licence to drive a vehicle is to be disregarded (the new subsection (1B)). In these circumstances the insurer has a right of recovery against the insured person (the new subsection (4A)).
(3) In the case of damage to property, if the amount of the judgment is more than £250,000 provision is made that the insurer need only satisfy a proportion of the judgment (the new subsection (1E)).
Regulation 6 amends the definition of “normally based” in Regulation 2 of the Motor Vehicles (Compulsory Insurance) (No.2) Regulations 1973 in accordance with Article 4 of the Council Directive.

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Source: https://www.legislation.gov.uk/uksi/1987/2171/note (the official version)
Page: https://openlegislation.uk/motor-vehicles-compulsory-insurance-regulations-1987/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.