Car Insurance when Drink Driving

mattluis

Hi,

I'm looking for a bit of advice.

Several months ago my sister did something horrible, and drove whilst over the limit for alcohol. She rear-ended a taxi and rightly has been banned from driving and got a significant fine.

We have a family history of alcoholism (our father died in an alcohol-related accident) but she has sought help and will be 8 months without a drink shortly.

My question relates to her insurance. She was insured but the firm have been in touch to say that because she was over the limit, she needs to pay back the costs.

They point to the following, which was in the policy:

If, following an accident, you or anyone named in the Certificate of Motor Insurance is convicted of driving whilst under the influence of alcohol or drugs, the insurer’s liability will be limited to the cover required under the Road Traffic Act and the insurer reserves the right to recover any amount from you that it is required to pay.

Now they settled with the driver for a very large amount, which there is no way my sister can repay.

They have now got lawyers involved and are threatening to take her to court. Can they do this? Are they not effectively making her un-insured? (and is there not a government fund set up to pay for uninsured drivers?).

Please do not reply if all you have to say is "tough, serves her right". I am inclined to agree but at the same time hate to see a relative go through this.

Thanks in advance for any helpful advice.

hugoshavez

They can do this, and I don't believe there is any fund she can call on in these circumstances.

The funds you're thinking of are there to help the victims of uninsured drivers, not the drivers themselves.

It's good to hear your sister's getting help. She'll also need specialised legal advice which can look in depth at the circumstances and her ability or otherwise to pay.

You say there's no way your sister can pay. If she has no significant assets at all then a legal representative could demonstrate this to the insurer's lawyers.

If she does have assets, a property with equity in it for example, then she's likely to have a fight on her hands and it'll be imperative to speak to a lawyer asap. Some will give a free 30 minute consultation to begin with.

InsideInsurance

mattluis wrote: »

They have now got lawyers involved and are threatening to take her to court. Can they do this? Are they not effectively making her un-insured? (and is there not a government fund set up to pay for uninsured drivers?)

The fund you are thinking of covers third party claims and it too has the right to recover its outlay from the uninsured at fault driver and so she'd find herself in the same situation.

Insurers are entitled to set terms and conditions to their policies and breaching those terms effectively invalidates the insurance. So drink driving, using your car as a taxi when you only insure it for personal social use, allowing your 15 year old kid to drive the car, setting up insurance but never actually paying for it etc.

Rather than the fund you mention, the MIB, pay for all of the claims relating to the above types of issues the RTA requires the insurer to settle the claim of third parties, despite the lack of valid insurance, but gives a right of recovery against either or both the driver at the time of the incident or the policyholder depending on the circumstances. This is normally reinforced by policy terms but strictly doesnt need to be.

Insurers dont want to lose money and so will seek reimbursement from her but at the same time they wont want to throw good money after bad. She needs to be fully open and honest with them about her financial situation and her ability to repay and propose a realistic repayment plan with them.

OnanTheBarbarian

Reality is that if she has no assets and already has any CCJ or other creditors chasing her, they will leave her alone, but she needs to demonstrate this to the solicitors appointed by her insurers.

Tell her not to ignore the situation as otherwise they will proceed against her and whilst she still probably won't be ordered to pay much, if anything, in the event she can prove herself to be impecunious, it is a load of stress and hassle which she probably won't need as a trigger to possibly cause her to lapse.

chanz4

also if pi is involved you cant go bankrupt and write it off

InsideInsurance

chanz4 wrote: »

also if pi is involved you cant go bankrupt and write it off

Really? The PI itself will have already been paid by the insurer and so you are only looking at a reimbursement of outlay. Does this rule still apply?

smifffy1989

mattluis wrote: »

Hi,

Are they not effectively making her un-insured?

If you read the policy by being over the limit she is uninsured. The insurers cannot however decline the third party claims and they have a right of subrogation against her.

I am not aware of the bankruptcy rule alluded to. I would have thought if she couldn't pay then she would be offered a repayment plan or she could go bankrupt.

Parking_Trouble

Get legal advice, fight it tooth and nail. Get a breakdown of the costs, challenge it and Negotiate,

Anyone seen these end up in court?

FlameCloud

Parking_Trouble wrote: »

Get legal advice, fight it tooth and nail. Get a breakdown of the costs, challenge it and Negotiate,

Anyone seen these end up in court?

Fight it tooth and nail? On what grounds? It is a contractual term in common across (I would hazard a guess) every motor policy.

It is even specifically mentioned as an allowed action by the insurer of the vehicles under the RTA - S.148 (6) and S.151 (8)

Parking_Trouble

FlameCloud wrote: »

Fight it tooth and nail? On what grounds? It is a contractual term in common across (I would hazard a guess) every motor policy.

It is even specifically mentioned as an allowed action by the insurer of the vehicles under the RTA - S.148 (6) and S.151 (8)

I would hazard a guess you know very little on this topic.
Check some policies. Admiral Group for sure and one maybe two others. It is not as common as you think.

FlameCloud

Parking_Trouble wrote: »

I would hazard a guess you know very little on this topic.
Check some policies. Admiral Group for sure and one maybe two others. It is not as common as you think.

Go on then, enlighten us... why would a contract term, specifically allowed in legislation, be challenged?