3rd party claim agaim against ex owner of bike

madca

:huh: The day after bike was sold, the new owner had an accident. I had 3rd party fire and theft cover as a named driver. Policy was due for renewal 1 month after bike sold. Renewal paperwork returned stating that insurance wiould not be renewed as bike sold. Policy not cancelled but lapsed.

The 3rd party has now made a claim against my insurance and my insurers say they will have to pay out against my policy as the new owner of the bike was not insured.

I cannot make any sense of this - I did not own the bike and was not riding it at the time the accident occured. How can a claim be made against my policy?

If this is right, does this mean that anybody, irrespective of whether they have a licence, banned from driving, stolen the vehicle or are young drivers have 3rd party cover on that vehicle. In effect this is what insurers are saying.

I would appreciate any comments or advice .

geri1965_2

If there is a policy in force on a vehicle, which is then involved in an accident, the Motor Insurers Bureau ask the insurer concerned to deal with the claim.

I don't think it will go against you personally though, it's just an agreement they have (willing to be corrected if I'm wrong as my motor claims knowledge is not the best).

You should really have cancelled the policy on the day you sold the vehicle.

*MF*

geri1965 is correct about how the MIB operate. Link to them here:
http://www.mib.org.uk/Default.htm

You are correct in stating the doubts you have about this - but the (additional) worry I have is that claims against policies are shared between Insurers, just like credit histories, so will a claim "dealt with" thru' your policy be logged against your name/record. Link to shared database here:

http://www.experian.co.uk/www/pages/what_we_offer/products/claims_underwriting_exchange.html

So altho' you maybe can't stop the claim being dealt with ...were it me, I would try to ensure that the claim is NOT logged in your name (simply because the policy involved was in your name - too easy for that to happen with computerised records) - don't know how that is done, but it strikes me as important for you that it is. Pressure the Insurers on that point, yes?

raskazz

I do agree that the insurers are right in saying that they have to indemnify the third party. However, I think it is more a case of a Road Traffic Act liability than an MIB claim.

Basically, under the RTA once a valid certificate is 'delivered' then unless the policy is cancelled (with the cancellation being effective before the time of the accident) and the certificate or statutory declaration returned within a specific timescale then the insurer will have to satisfy the third party's claim, regardless of who was driving (sections 151 and 152 of the aforementioned Act, in particular 151(2)(b)). This is to ensure that innocent victims of accidents are compensated.

The insurer will, however, have the right to reclaim its outlay from either the driver or yourself. I am sorry to say that the incident will go against you as a fault claim (unless the insurer recovers all its outlay) as you should have informed the insurer of the sale of the vehicle either before it happened or immediately afterwards.

missile

Wow, makes a mental note to cancel insurance when I sell.

I guess this does not happen, if you have transfered insurance to a.n.other vehicle?

Quentin

Correctly guessed!