The impact on motor insurance in Malta of the proposed changes to the motor insurance directive relating to the definition of ‘use of a vehicle’ : an analysis

Abstract

The main aim of this study is to understand the effects of the potential outcomes of the MID, on Maltese insurance companies. The researcher chose to conduct a study on this subject because of the ambiguity that was created by the CJEU judgements in the Vnuk, Andrade, Torreiro and Juliana cases with regards to the definition of ‘use of a vehicle’. In order to try and do this, the researcher chose to conduct a study using a qualitative approach by conducting interviews with Maltese insurance professionals. By understanding the current effects on the market and the potential effects of the amendments, the researcher aimed to provide Maltese insurance companies with a forward-looking research in order to help them prepare for the potential effects of the amendments to the MID, on their companies. The researcher found that the main concern for these insurance companies, was that the current definition of ‘use of a vehicle’ in combination with the judgements of the CJEU, provided cover for certain circumstances that they were excluding in their policy wording. Insurance companies do not want to provide cover for racing, use on private land and use of a vehicle as a tool, since their current premiums do not charge for this additional risk. The researcher found, that if insurance companies are made to cover these additional risks, by means of the amendments to the MID, the insurers would have to increase their premiums and combine the tool of trade policy with the MTPL policy. Therefore, the researcher has concluded that there will be significant effects on Maltese insurance companies, if the amendments are finalised as discussed throughout this study.