Can motor insurance be retroactively cancelled?

ukBp_Roy

tldr: Can a motor insurance policy (specifically a trade policy) be cancelled, but the cancellation be backdated to before an accident?


Long version:

My brother was hit by a van being chased by the police while he was driving his car on Monday night. The van driver crashed further down the road, and was arrested. At the scene the police told my brother the van driver was uninsured and gave him a reference number so he could call them about it later.

He called me, and I went and looked at his car. There is a fair amount of damage so being a 52 plate Skoda Fabia will almost certainly be written off. I took the number plate of the van and using the MIDs at-scene insurance check tool (works brilliantly) the van was listed as insured by Tradewise. Interestingly the vans MOT expired and has been SORNd since May 2015.

On Tuesday my brother rang his insurance (he is fully comp with Elephant) and they advised him to start a claim through them, which would mean he'd pay his excess but they would claim it back from Tradewise. Being unsure of how it all works and what to do he started the claim, before they'd collected the car I advised him it might be better to go directly to Tradewise so there'd be no excess up front and no chance of losing his no claims bonus, so he cancelled the claim with Elephant.

So, he rang Tradewise who confirmed the van was insured with them. At first they seemed quite helpful, offering a courtesy car once they could speak to their policyholder. Unfortunately the policyholder says he's sold the van and it's nothing to do with him. Tradewise are now telling my brother they won't do anything until they either do or don't receive proof from their policyholder that it had in fact been sold. Because it's a trade policy they say if it had been sold they will look to backdate the termination of the policy to before the incident with my brother, meaning my brother will not be able to claim against them. Tradewise say they will contact my brother some time next week, which is all well and good except he's left with no car!

The police have been less than useless. When my brother rang them they told him to call the roads unit in another town. The roads unit say oh no, we won't get any details for at least a week, call back and ask for the officer who was at the scene. My brother does so to be told blah blah blah data protection act we can't tell you anything!

I was under the impression that as long as a vehicle is covered by a policy it has to at least cover third party claims, no matter who was driving. I don't know for sure, but I can't see how insurers could be allowed to backdate the cancellation of a policy, either it's covered or it's not, surely they can't go back and take it off the database after it was on there! My biggest concern is that being a trade policy it might have different rules and perhaps doesn't cover this situation. We don't even know if the driver on the night bought the van, stole it, or even is the policyholder and is lying!

So if anyone knows the intricacies of trade motor insurance policies, or has any ideas how to move forward and get my brother some wheels back it would be very much appreciated.

AdrianC

This may be relevant.
http://www.whitedalton.co.uk/motorbike-blog/2015/05/sold-a-bike-cancel-the-insurance-or-face-a-massive-risk/

If the insurer weren't notified by their policyholder of the sale, then they should still be liable. It may well get horribly legal, though, so your brother's best bet is probably to claim off his own policy and let them sort it all out.

The one good thing is that you know who the driver is, and there's absolutely no denying it.

dacouch

Not that unusual in the motor trade for a sloppy back street seller to sell a vehicle and not remove it from the MID.

He'll need good records eg sales receipts and the buyers details to satisfy Tradewise

angrycrow

The Tradewise policy will only be valid whilst their policy holder has an insurable interest in the vehicle, as soon as their policy holder sells the van cover stops. Motor trader policies often cover multiple vehicles and some policies only require updates on the vehicles on cover once a month so there can be long periods when a vehicle is still on mid but not actually covered. The trader will need to provide proof of the sale and if he can do so there will be no cover under the policy.

Check with your own insurer if they offer uninsured driver protection in which case your excess will be refunded by your own insurer and your NCB not effected.

OnanTheBarbarian

If the motor trader can prove sale of the vehicle (so that he has no insurable interest) then Tradewise will not have to deal.

Usually with trader policies, the policyholder does not have to inform the actual insurer of the vehicles they are putting on cover, all that is required is for the trader to personally log the vehicle as insured under their policy with MID. Often they forget to then update MID after selling the vehicle, so you get this situation where it appears the vehicle is on cover, yet it actually is not.

The best way forwards here is going to use own fully comp cover to get the vehicle sorted and claim via MIB Uninsured driver agreement for any injuries and uninsured losses.

foxy-stoat

Is the car still driveable and roadworthy?