Hi Sabine,

I also got my car insured with Dragon Insurance.  I specifically checked with them that it was insured without UK tax or MOT and they confirmed that it was.  

There does seem to be a widely held belief that insurance is only valid if the vehicle is 'Road Legal' in the country of registration.  Having read my insurance policy shedule and certificate from cover to cover (not a fun thing to do!) there is absolutely no mention of the roadworthyness or legality of the vehicle whatsoever.  If someone has WRITTEN evidence of this then I'd love to see it (maybe some insurance policies require this or maybe it's just another unfounded rumour).  The policy I have is underwritten by one of the Lloyds of London sindicates (as are many).

Nigel