Hard to get the full story in a thread title but, phhhhhh, ‘kin ell!!

http://britishbikersassociation.org/blog/entry/scots-biker-in-insurance-hell-after-legal-loophole-forces-him-to-pay-thousands-for-death-crash-on-his-old-bike

I’ve done it on purpose in the past – Sold a car and let the insurance run out to get another years NCB.

EDIT
Sorry Mods, wrong forum 🙂

Seen that the other day mad isnt it. Ive done the same on bikes for extra ncb too

I’ve done it on purpose in the past – Sold a car and let the insurance run out to get another years NCB.

You have got to be kidding 😯

This came up on a car selling thread a few days ago. But, yea, it’s ridiculous.

Make a note not to use MCE in the future!

You have got to be kidding

No, I’m not. Didn’t realise there was anything wrong with that 15-20 years ago.

That will explain alll the flowers on the seaton road at the weekend then.

Holy cow! 😯

I doubt that it’s just MCE who’d take this stance.

I’ve also done that on purpose in the very distant past (cars and bikes) but I was aware of this issue from a report I read last year.

I did it when I sold my car a couple of years ago as I bought my new car before selling the old and the cost of temporary insurance for a second car on my policy was more than the effective cost of the couple of months of insurance left on the old one. The cancellation charge for the old policy was then more than the amount of refund I’d have got.

f*ken ell that whole story is a can of worms on every level.

surely if the V5 has been handed over then there is no longer an ‘insurable interest’ ? otherwise you’d be able to have a policy in force on Vettel’s red bull and get a crash payout if he stacks it…

I doubt that it’s just MCE who’d take this stance.

No, but if enough people make it clear to them that they dont find that acceptable by saying as such when not renewing their policy then maybe they’ll ammend their policy wording. Even if all the other underwriters have similar policies youre making the point that you dont feel they acted fairly or with integrity in this case.

It’s in their benefit anyway surely to void the policy as soon as the V5 is completed, they dont want any muppet riding round on the policy.

Ed.. maldonado, shirley? 🙂

Absolutely ridiculous !,however we should all take note that’s for sure !..

There’s lots of uses of the word “could” in that story. could be liable, could be forced to pay costs etc..

I think the insurance company is just trying it on. I doubt they’d succeed. Most reasonable people would not agree that selling a bike constitutes giving a stranger permission to ride it on your insurance.

Thread title’s a bit misleading don’t you think OP?

He’s not “liable for death crash on bike he sold” He’s picking up the tab because He didn’t cancel the policy straight away, you can sort of see where MCE are coming from, but it is ultra-Gittish and makes for some pretty crap PR with bikers, surely they’ll do a U-turn…

TBH if MCE actually did take it to court to “Recover costs” the fella could probably claim the bike was obtained by deception, and his having sent off the V5 was clear enough proof that he had relinquished ownership of and responsibility for the bike and was clearly not intending to make use of a policy he thought was now superseded by the buyers own…

Could MCE not put a claim into the Uninsured Drivers fund for this? Or is that simply not how it works?

Is there actually any requirement in law for the seller of a vehicle to verify the buyer has a valid licence and insurance before completing the sale?

I guess the moral of the story is, cancel the policy as soon as the thing is sold…

Make a note not to use MCE in the future!

It’s not their decision but it will be forced upon them by the Motor Insurer’s Bureau who deal with uninsured/untraced driver incidents in the UK.

The last time I looked into one of these it was along the lines of if the MIB funds (levies received from Insurance cos) were running low/depleted they have an option to look for what they refer to as the “nearest applicable insurer”. In this case, it is clearly the one that was still showing as insuring the bike on the Motor Insurance Database.

In theory, this should have no impact on that policyholder’s insurance going forward as it is an industry agreement however, if you have been negligent or deliberately exposed your insurer to the loss they do have the right to subrogate against you. This is very rare and I’m only aware of it happening once in the last 25 years.

Since the MID has been in force it has been an offence to put a vehicle on it with false information & leaving it there when you no longer own it falls into this category. If you don’t tell insurers you’ve sold it then they don’t remove it from MID, the Police & APNR cameras do not subsequently pick it up as uninsured so it enables folk to drive around without cover. If they then have an accident…..

Most reasonable people would not agree that selling a bike constitutes giving a stranger permission to ride it on your insurance.

But that’s not exactly what has happened here. He’s certainly given him permission to ride it away, but that’s simply the mechanism which susbsequently leaves his insurance policy in place should he be daft enough not to cancel it.

It’s not an isolated case, either, and seems pretty legally solid.

I sold my bike but didn’t cancel my insurance

That’s what happens when you join up lots of insurance databases…

From the MIB Uninsured Driver Agreement:

In cases where it is ascertained that there is in existence a policy issued in compliance with the Road Traffic Act 1972, the insurer will act as the agent of the Bureau even if entitled to repudiate liability under the policy and, subject to notice being given as provided for in Clause 5(l)(a)(ii), will handle claims within the terms of the Agreement.

In many cases, particularly where the vehicle was being used without the policyholder’s authority, the provisions of the Road Traffic Act precludes repudiation by the insurer of a victim’s claim. Victims and those acting on their behalf are expressly reminded of the requirements as to the giving of notice to the insurer if the protection afforded to third parties by section 149 of the Road Traffic Act 1972 is sought. It must be stressed that the above arrangements are without prejudice to any rights insurers may have against their policyholders and, to avoid any possible misunderstanding, it is emphasised that there is nothing in this Agreement affecting any obligations imposed on a policyholder by his policy. Policyholders are not released from their contractual obligations to their insurers, although the Road Traffic Act and MIB protect THIRD PARTY VICTIMS from the consequences of failure to observe them. For example, if a policyholder fails to notify claims to his insurers as required by his policy or permits an unauthorised person to drive, he may be liable to his insurers.

surely if the V5 has been handed over then there is no longer an ‘insurable interest’ ? otherwise you’d be able to have a policy in force on Vettel’s red bull and get a crash payout if he stacks it…

Insurance law is very clear on this^^ (although the Vettel bit is arse-about-face), and because of it there’s no way the policy holder can be held liable and all that other legalese guff is irrelevant.

I’ve done the same in the past, when selling a bike while not intending to buy another straight away.

Logic been that I may as well have the extra years NCD and the money I’d get back from cancelling just wasn’t worth it.

But that’s not exactly what has happened here. He’s certainly given him permission to ride it away

Not nececeraly, he took it away in the back of his car. The previous owner could claim (seeing as there’s no one left alive to dispute it) that he didn’t give his permission to ride the bike?

It’s not their decision

Hmmm, bet they’d be a bit more likley to push it back to the MIB if it started costing them money in lost premiums.

I don’t see this as the insurance companies fault. It is MCE who have been pursued for the costs (not sure by whom, I assume the insurance company of the Yaris). As MCE has been found liable (under UK case law) then it does seem commercially reasonable for them to pursue the seller. What surprises me is that the insurance doesn’t automatically lapse in terms of cover and in terms of liability once the bike is sold.

He’s certainly given him permission to ride it away,

I would say that once I have sold a car, I am in no position to give or deny the new owner permission to do anything they want with it. Any more than I give my mum permission to drive her car. Sure, I could let the air out of her tyres, but by not doing that, I am not giving her permission to drive it.

Of course, though, IANAL, and there seems to have been attention given to this from people who are. It’s nuts though, clear and simple. My insurance policy is no longer valid once I’ve sold the car; the fact that I’ve forgotten to cancel it (or not done it the instant the car rolls away) should not make me or my insurers liable for anything done with it. Otherwise the system is borked.

Isn’t it slightly more complex? The car was in collision with Bike. Check would be made on databases for Bike insurance. Database says it’s insured on a given policy, claim goes through on that policy.

Issue is that deceased had no policy. What would happen if he’d tried? I was under the impression you can’t have two policies on the same vehicle.

Database says it’s insured on a given policy, claim goes through on that policy.

I don’t think it’s remotely as simple as that. What seems to be the case is that the database says that a policy exists with respect to the vehicle. The database does not in any way make a judgement as to whether the policy is valid. The weird bit is that apparently, since there is a policy in existence relating to the vehicle, then in the absence of any trumping policy, that one must play a role. Where in this case it seems that the insurance company has to pay out, but can then pursue the policy holder. That’s weird. This doesn’t happen automagically by computer – I don’t think Churchill will ring you up and say “Oh no no no no no no, database says it’s your car so it *is* your car, so you must pay.”

Bear in mind that for all it’s faults, this is the system us cyclists rely on if hit by an uninsured driver….

Or, more often, an untraced one.

As and when I sell a car privately I always get the buyer to sign a little receipt “sold and seen etc”. With this in mind I might think about adding an extra line, something along the lines of

“I [the buyer signed] have the relevant license, insurance and taxes (VED) etc in place to drive [the vehicle] legally on public roads and the seller has no responsibility with regards it beyond [Date, Time, Mileage]”

An accident could happen literally minutes later, I’d have sorted the insurance out, but perhaps that evening or in the next few days not necessarily that minute!

I’d be surprised if it this actually happened though

I’ve done it on purpose in the past – Sold a car and let the insurance run out to get another years NCB.

Surely by doing this you are trying to get something for nothing. I.e. you are claiming an extra years of insurance, but should something happen to the vehicle in question then are claiming your insurance isn’t liable.

When you take out an insurance policy they are very very clear that you need to inform them should there be any change of ownership or modification to the vehicle in question.

Pretty much what I was trying to say gray. No trumping policy so policy in place takes the hit. Exownerhas not complied with his policy, therefore insurance company comes after him for their costs.

Yeah, I think in this scenario, it’s clear that basically the problem is that somebody was uninsured. Now, I’m all in favour for a system like the MIB to be in place to cover that situation, but surely the ‘right’ thing is for the uninsured loss to be covered wither by a government fund, or a pool paid into by all insurance companies, not for some poor unsuspecting individual to be chased for thousands of pounds. By all means fine them an admin cost for not complying with the letter of their policy, but it’s simply not reasonable to do any more than that.

To summarise then as i think I’m getting confused – the bike is involved in an accident – the other party attempts to recover their losses via the insurance policy that’s in place for the bike (you don’t have to own a vehicle to have an insurance policy on it – look at loan cars for example, some companies require to have your own insurance). The bikes insurance policy pays out as its legally obliged to do then it finds out that the person who bought the policy hasn’t complied with their contractual (and legal?) obligation to inform the insurance company that they no longer owned the vehicle. They then try to recover their losses from the individual.

I think the only time you’re safe insuring a car that you no longer intend to drive is if you have it rotting in the garden or if it’s been quietly scrapped.

Companies should offer you the chance to insure a null vehicle for a very modest charge when you end up in between cars to preserve your NCD

To summarise then as i think I’m getting confused – the bike is involved in an accident – the other party attempts to recover their losses via the insurance policy that’s in place for the bike (you don’t have to own a vehicle to have an insurance policy on it – look at loan cars for example, some companies require to have your own insurance). The bikes insurance policy pays out as its legally obliged to do then it finds out that the person who bought the policy hasn’t complied with their contractual (and legal?) obligation to inform the insurance company that they no longer owned the vehicle. They then try to recover their losses from the individual.

Does sound disarmingly reasonable when phrased like that, but if you sell a motorbike outside of office hours the insurance co won’t be notified until they’re open. Armies of uninsured drink and drug addled lunatics could cause mayhem with it in the intervening hours. Surely a reasonable layman would agree that a policy from Scumco that insures Bert to drive Daisy cannot be assumed to cover Ernie. Ernie != Bert.

A collegue sold his motorbike recently and cancelled the insurance.

The policy was £87 and 6 months left to run. To cancel it he had to pay an additional £50. He complained a lot and got it down to £25 – but I do wonder how they can justify these charges

so he sold his bike , but hoped to gain a financial advantage by keeping it insured and thereby getting a no claims discount for a bike he was not ridding .
But rather than his trick working in his favour he got bit because the bike he was maintaining insurance on was in a crash so the insurance policy he chose to carry on with received a claim and had to pay out. His insurance co look to recover their loss from him as he was in breach of his contract and in doing so had exposed them to risk.

Why is this wrong?

He promised his insurers he would tell them if he sold the bike he broke his promise his insurers lost a lot of money because of that and want him to make good.

FYI – no claims bonus’s don’t just vanish if you don’t keep up insurance – just taken out new motorcycle insurance and old ncb was valid for up to two years – although the std period is one year

Yes but if you sold your bike after eleven months it’s be very tempting to keep the policy running for four weeks to get the extra years no claims.

One of the sad hings is that he probably can’t afford to defend himself

It may be a completely valid point that once he no longer owns the bike he is no longer liable

But he might have to pay up what he can as that might cost less than defending his position

I wonder if he legal cover for uninsured losses