Insurance is compulsory whether or not the car is driven, according to the EU Court

A ruling by the European Court of Justice establishes that a roadworthy vehicle must be insured even if it is kept parked on private land.

The insurance broker, insurers… will be part of your vehicle's life – and therefore yours – even if you do not intend to drive it any more and it is parked on private land; provided, that is, that the car is roadworthy. The Court of Justice of the European Union thus sets case law based on a judgment of 4/9/18 (C-80/17) that will affect the Member States of the Union. As a vehicle owner, every European citizen must take out third-party liability insurance since, in the event of an accident, the national compensation body could hold them to account (even if the owner of the car was not civilly liable for the accident).

"A vehicle which has not been officially withdrawn from use and which is fit to be driven must be covered by motor vehicle liability insurance, even if its owner, who no longer intends to drive it, has chosen to park it on private land", the judgment states. The CJEU adds that Member States may provide for national compensation bodies to bring proceedings against the owner of the car if the vehicle is not insured against third-party damage in the circumstances described.

Alina Antonia Juliana, the owner of a vehicle registered in Portugal, kept her car parked in the yard of her house; she had stopped driving for health reasons, but had not officially deregistered the vehicle. In November 2006, Juliana's son took the car without her permission and without her knowledge; an accident in this vehicle, which left the road, would cost him his life and the lives of two other people travelling with him.

As she had no insurance, and despite having no involvement in the accident, the Fundo de Garantia Automóvel* sued Juliana, claiming payment of 437,345.85 euros: the amount the body had paid in compensation to the passengers' families. The defendant argued that she was not liable, since her car was parked on her property and she had no intention of putting it on the road, and was therefore not obliged to take out motor vehicle liability insurance.

There are two Directives on civil liability arising from the use of motor vehicles. The First, from 1972, provided that insurance was compulsory for owners of vehicles used in the Member States. The Second, from 1984, provided for a body to compensate for damage to property or personal injury caused in particular by an uninsured vehicle.

With this ruling handed down in Luxembourg on 4 September, the Court of Justice declares – under the First Directive – that it is compulsory to take out an insurance contract when the vehicle is still registered in a Member State and is fit to be driven. Even if the car is parked on private land and the owner has no intention of driving it. The European Court, however, has not settled the dispute in the country, which will be left to the relevant national judiciary; the Portuguese courts, in this case.

According to this article from Motor.es, around two million vehicles without compulsory insurance are on the road in our country (10% of the vehicle fleet, taking into account those registered since 1996). 2017 saw a record number of penalties for driving uninsured vehicles: as many as 132,288 drivers were penalised (excluding Catalonia and the Basque Country).

* Motor insurance guarantee fund in Portugal.