5 November 2019
Will Brexit affect your Taxi Insurance?
Will Brexit affect your taxi insurance? Here’s what you need to know:
With Brexit just around the corner, there’s still a lot of confusion, and a lot of questions to be answered. Here, we’re going to try and cover all the questions you might be most uncertain about.
As of right now, we don’t know whether we will leave the European Union with or without a deal, and as such, our answers may change as we are given more news. For updates on Brexit, you can visit the Government’s official Brexit page here.
The relationship between Freeway and La Parisienne Assurances (LAP):
If the UK leaves the EU with a deal, there will be a transitional period that will allow firms such as La Parisienne Assurances time to become authorised in the UK, and to establish a UK office.
However, if the UK leaves the EU with no deal, a Temporary Permissions Regime will allow LAP to continue trading for a limited period as they apply for full authorisation from the FCA, this temporary period will be a maximum of three years.
Will I need any additional insurance?
No, Brexit will not mean you will need any additional insurance, or different insurance.
Will there be any changes to any contractual arrangements?
No, customer insurance contracts will not be affected.
Will there be any price raises after Brexit?
If we leave the EU without a deal, there will likely be an increase in the after-market parts costs driven by tariffs between the UK and the EU. It is likely this will result in a higher premium rate for taxi insurance.
There may also be a reduction in the supply of reinsurance, as some of the EU’s regulated insurers may no longer be able to operate within the UK. In this event, it would result in higher premiums for those already insured, as insurers will need to raise premiums to cover the reduction in their margins.
What if a deal is made?
If a deal is made, then you need not worry, as it is unlikely that there will be any changes for the imminent future.
Could any rules change after Brexit?
In the event of a no deal Brexit, UK Insurance companies will no longer have to abide by EU rules/regulations. However, we have no plans to change any of our existing rules or policies, and it is unlikely that the UK government will make any drastic changes.
Could there be any positive effects?
There may be some potential positive effects in the event of a no-deal Brexit. For example, there would be freedom for legal reform, without the restriction of the EU courts of law. This could result in a more favourable legal environment for insurers, and those insured.
Insurers could also be relieved from the requirement to meet Solvency 2 capital requirements, promoting competitiveness and more risk taking. This could result in lower premiums for those insured.
Will my licence be affected?
If you have an EU driving licence, it will still be valid in the UK after Brexit. However, it is highly advised that you apply for a UK license as soon as possible.
Will I need a green card?
In the event of a no-deal Brexit, drivers with UK-registered vehicles may need to carry a motor insurance certificate or document to drive in the EEA (the EEA includes all EU countries, as well as Norway, Iceland, and Liechtenstein). The green card certifies that the driver has the necessary minimum insurance cover for driving in the countries listed. They are free to apply for from the insurer (however, your broker may charge an administration fee to process your request), and will be applicable from the day we leave.
What about the Financial Service Compensation Scheme (FSCS)?
The FSCS provides compensation and protection to customers of authorised financial services that have failed.
Regardless of whether or not the UK leaves the EU with a deal, FSCS protection for UK-based customers of UK authorised firms will not change as a result of Brexit. However, if a customer or their firm is based in the EEA, FSCS protection may change if the UK leaves the EU without a deal.
The UK government has agreed that the transfer of Personal Data can continue in the event of both a deal, and no deal, scenario. However, the EU is yet to reciprocate in the same way. The main area of difference is in relation to no deal for Personal Data being transferred from EEA states, will require contractual arrangements to ensure this can continue, which Freeway have in place to ensure no interruption of data flows.
As Brexit day gets nearer, we hope the answers to these questions will become a lot clearer once we know which direction the country is heading. However, if you have any queries or concerns that weren’t mentioned here, feel free to contact us on 01928 520 520.