Motability insurance rules explained

Insurance is always included when leasing a vehicle through the Motability Scheme. The current provider is RSA Mobility (RSAM), although this is changing to Direct Line Motability (DLM) on 1 September 2023.

In this article we will explain everything from what the insurance covers, how to claim and restrictions and usage allowances.

What does the Motability insurance policy cover?

Motability insurance covers all the usual things you would expect from comprehensive vehicle insurance, including:

• Loss of or damage to your vehicle
• Accidental, fire or theft damage
• Repair or replacement glass
• In-car equipment (like a radio) permanently fitted or given with the car
• Replacement locks if the keys have been stolen and the theft reported to the police
• Any accessories or tools given with the vehicle
• Travel to and from your normal workplace. Named drivers who do not live with you might not be covered for these journeys. This point is discussed on an individual basis at the start of the lease

It also covers some less common scenarios such as:

• Adaptations and modifications that are needed, which has been agreed to with Motability and which the insurance provider has been told about
• Driving your vehicle for voluntary or charitable work, as long as you do not receive a fixed, regular payment for this

In a situation where you are not able to drive the vehicle after an accident, you may be provided with a replacement vehicle. If this is not possible, you may be able to claim for ‘loss of use’ benefits.

If you are involved in an accident that is not your fault and the other person is identified, the insurer will attempt to recover the uninsured losses from them. These can be things like taxi fares, excess paid and costs for injuries sustained.

While not specifically part of the insurance package, every Motability vehicle is also covered for servicing and routine repairs.

What doesn’t it cover?

Like any motor insurance, there are certain things that are not covered by your Motability Insurance scheme. These include:

• Excess payments – these are payments that need to be made before a vehicle is repaired. The amount varies based on the age and experience of the driver.
• Lost keys – Replacing lost keys and/or door locks is not covered unless the keys have been stolen and the theft has been reported.
• Personal belongings – No personal items kept inside the car are covered. However, most household insurance policies can be extended to cover personal belongings in your vehicle.
• Modifications or non-standard equipment – Items fitted to the car which are not required for you to use the vehicle are not covered. Equipment fitted without informing Motability and the insurer will also not be covered.
• Damage to the inside of the vehicle – damage to the trim including rips or stains are not covered.
• Driving other vehicles – you are only approved to drive the vehicle that has been provided by Motability and approved by the organisation.
• Unauthorised and uninsured drivers – Only named drivers are covered. You can insure up to three drivers for your vehicle and these can be changed at any time. They will still need to adhere to the Scheme guidelines.
• Using the vehicle for business reasons – If the vehicle needs to be used for any business-related purpose other than travelling to and from work, you will need to contact the provider to ask for additional cover.

Who can be added as a named driver?

You can have up to three named drivers on your policy. These can be changed at any time, but you must inform the dealer of your driver list every time you order a replacement vehicle.

To be accepted as a named driver there are some checks and eligibility criteria that need to be met:

• Drivers under 25 years old are only eligible to drive certain vehicles (more on this below)
• Only one driver under 21 can be a named driver and they must reside at your address (that is the main policy holder)
• If no named driver lives at your address a location tracker may need to be fitted to the vehicle
• The vehicle must only be used for your benefit
• The driver must have a legally valid driving licence
• Drivers who have broken the law in the past five years will not be accepted

For more information on this topic read our Motability Scheme eligibility article here.

Are there any restrictions for young drivers?

Drivers under the age of 25 have certain restrictions to which vehicles they can drive:

• Petrol, diesel or hybrid cars must have an ABI Insurance Group of 16 or lower and have 120bhp or less
• Electric cars need have an ABI Insurance Group of 21 or lower and 120bhp or less
• Wheelchair Accessible Vehicles have no bhp restrictions

There can be only one named driver under 21 years of age on your insurance. They also need to live at the same address as the main policy holder. Provisional licence holders need to meet a few extra conditions to be allowed to drive in Scheme vehicles. Read about the best Motability cars currently on offer here.

Can you use your Motability vehicle for business use?

Your Motability vehicle is only covered for travel to and from your usual workplace. Driving your vehicle for voluntary or charitable work is also covered, as long as no fixed or regular payment is received.

For any other business-related driving needs you will need to contact the insurance provider and ask for cover. If the cover is approved, it will only apply to the existing lease and will need to be renewed for subsequent vehicles.

Can you drive your Motability vehicle abroad?

Yes. You can take your car abroad at no extra cost for up to 90 days in a 12-month period. You will need to get a VE103 form which proves that you are allowed to take your vehicle abroad by calling RAC Motability Assist on 0800 731 3310 three weeks before departure.

If you need to be abroad for longer than 90 days within a 12-month period you will need permission from Motability to do so. Contact them at least three weeks before you leave on 0300 456 4566 or use live chat. If the request is accepted, you will receive confirmation in writing.

• You can use your car or Wheelchair Accessible Vehicle in the European Union (EU), Iceland, Norway, Switzerland and Liechtenstein.
• There is no cover for legal expenses or replacement locks while abroad
• Be sure to ask for European Breakdown Cover from RAC Mobility Assist when applying for your VE103. If you don’t you will be liable for any recovery charges if you break down.
• Your vehicle will need to display a ‘UK’ sticker. GB stickers are no longer used.
• It is advisable to print out a ‘Statement of Facts on Motor Vehicle Accident’ form in both English and the language of the country you’ll be visiting. This will make exchanging accident details with a foreign driver far easier.
• Your UK photocard driving licence is accepted abroad. If you have a paper driving licence an International Driving Permit (IDP) may be required.

Can you build up a no claims bonus?

• You cannot build up a no-claims bonus while under the Motability Scheme
• You can apply for a claim history letter from the Motability insurer as proof of your claims history

Since the vehicle is owned by Motability you cannot build up a no-claims bonus. However, you can apply for a claim history letter from the Motability insurance provider which shows any claims made during the lease period.

Most insurers will accept this letter as proof of your claims history (and of the named drivers) during the Motability lease period.

How do you make an insurance claim?

Following an accident or incident on the road you need to do the following:

• In the event of injury or vehicle damage you will need to provide your Certificate of Motor Insurance to the affected parties and the police. If this isn’t possible your details need to be provided to the other party (or parties) and the accident reported to the police within 24 hours.
• If the car is undrivable after the incident, call RAC Motability Assist on 0800 73 111 73. You can also contact roadside assistance on 0333 202 1878 (1800 535 005 for the Republic of Ireland)

To make a claim with the insurance provider you will need to:

• Contact the insurance provider on 0300 037 3737 as soon as possible after the incident.
• Forward any letter you receive regarding the accident to the claims department. If you do not cooperate during the claim, it may be denied, and you could be banned from leasing a Motability vehicle in the future.