Individual vehicle insurance (material damage and liability)
EEA and Switzerland
The location of risk is determined by the country in which the insured motor vehicle is registered.
South Africa and Illinois (US)
The location of risk is determined by the country where the insured company or other entity covered by the insurance has its establishment(s).
Other countries
The location of risk is determined by the country in which the insured motor vehicle is based.
Non-registered vehicles, eg racing cars, earth moving machines, classic cars in a museum, stock held by a garage, etc.
If the contract insures a motor vehicle that is not registered the location of risk is determined by reference to the country in which the insured motor vehicle is based (ie as property).
Fleet motor insurance
The same rules apply as to individual vehicle insurance. If insured vehicles are registered or located in different countries, the insurance may be a global contract – see below.
Motor traders insurance
Typically, a motor traders insurance policy includes different forms of cover. Usually the road risk cover is not limited to specified vehicles, so it is not possible to use the registration or location of the vehicles to determine the location of risk.
Consequently, the location of risk will be determined as follows:
- If the contract insures the motor traders premises, the risk is located in the country where the premises are located.
- All other parts of the contract will be located in the country where the insured is located.
Global contracts
A Global contract is a contract insuring risks located in more than one country.
A motor insurance contract is a global contract if:
- It covers more than one vehicle and those vehicles are registered in different EEA Member States (or in Switzerland).
- It is taken out by a corporate body and covers individuals employed by, or otherwise associated with, other corporate bodies or other establishments as well. The contract may refer to specific named entities or may state that individuals employed by all subsidiaries, associated companies, branches (or other forms of establishment) are covered under the policy.
When identifying the location of risk for a contract covering a single corporate entity its branch structure and other types of establishment associated with the risk should be considered even if they are not specifically referred to in the contract. “Establishments” are discussed in detail here.
Premium apportionment
A global contract may give rise to regulatory and tax exposures in different jurisdictions. Compliance with these requirements requires the overall premium to be apportioned between the countries in which risks are located. Guidance on premium apportionment is provided here.
