Breakdown cover and road tax

shinytop

Car_54 said:

This is an issue that used to come up from time to time in the recovery industry. There were concerns among mechanics that towing an untaxed car was illegal (probably not), or even that simply fixing it would be aiding and abetting (complete nonsense).

However, that was in the days when tax discs made the vehicle's status obvious. The OP's account suggests that the RAC routinely check tax online for every breakdown. Can that be true?

Yes, it can be and is true.  

shinytop

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

Aretnap

shinytop said:

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

It's not as simple as that though, for the reasons I outlined already. Had your 'friend' ended up having to pay the £160 the advice I'd have given him would have been to complain to the RAC, and then to the Financial Ombudsman if necessary. His chances of getting his money back would have been good. To justify refusing to honour his policy the RAC would have to have shown one.of three things

(1) His breach of the policy terms (ie his failure to tax the car) caused the breakdown.

(2) It was reasonable to refuse him help, because they'd have been helping him to illegally get his untaxed car back into the road or

(3) The costs of recovering an untaxed car are greater than for a taxed one.

(1) is obviously not true. (2) is hopelessly undermined by the fact that they were willing to help him get his untaxed car back on the road if the price was right. That leaves (3) which might just be arguable, but it would depend on the exact circumstances, and it doesn't sound like it featured in their initial justification.

Stubod

shinytop said:

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

..so they should refund his annual subscription then??

shinytop

Aretnap said:

shinytop said:

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

It's not as simple as that though, for the reasons I outlined already. Had your 'friend' ended up having to pay the £160 the advice I'd have given him would have been to complain to the RAC, and then to the Financial Ombudsman if necessary. His chances of getting his money back would have been good. To justify refusing to honour his policy the RAC would have to have shown one.of three things

(1) His breach of the policy terms (ie his failure to tax the car) caused the breakdown.

(2) It was reasonable to refuse him help, because they'd have been helping him to illegally get his untaxed car back into the road or

(3) The costs of recovering an untaxed car are greater than for a taxed one.

(1) is obviously not true. (2) is hoptheelessly undermined by the fact that they were willing to help him get his untaxed car back on the road if the price was right. That leaves (3) which might just be arguable, but it would depend on the exact circumstances, and it doesn't sound like it featured in their initial justification.

How about (4) The insurer's underwriting decision is that the risk of an untaxed car needing recovery is greater than a taxed one and this policy was priced for taxed vehicles.  In accepting the terms and conditions when buying this policy that had been priced specifically for taxed vehicles, the insured agreed  that cover was dependent on the insured vehicle having valid road tax. 

It was easier just to tax the car anyway.      

    

Marvel1

prowla said:

I don't think it's the RAC's business whether the car is taxed.

If it's in their T&C's which people agree too, then it is.

Car_54

Marvel1 said:

prowla said:

I don't think it's the RAC's business whether the car is taxed.

If it's in their T&C's which people agree too, then it is.

Aretnap has already explained above why it is unenforceable in the context of an insurance contract.

As a general point, any contract terms can be struck out by a court as "unfair".

Aretnap

shinytop said:

Aretnap said:

shinytop said:

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

It's not as simple as that though, for the reasons I outlined already. Had your 'friend' ended up having to pay the £160 the advice I'd have given him would have been to complain to the RAC, and then to the Financial Ombudsman if necessary. His chances of getting his money back would have been good. To justify refusing to honour his policy the RAC would have to have shown one.of three things

(1) His breach of the policy terms (ie his failure to tax the car) caused the breakdown.

(2) It was reasonable to refuse him help, because they'd have been helping him to illegally get his untaxed car back into the road or

(3) The costs of recovering an untaxed car are greater than for a taxed one.

(1) is obviously not true. (2) is hoptheelessly undermined by the fact that they were willing to help him get his untaxed car back on the road if the price was right. That leaves (3) which might just be arguable, but it would depend on the exact circumstances, and it doesn't sound like it featured in their initial justification.

How about (4) The insurer's underwriting decision is that the risk of an untaxed car needing recovery is greater than a taxed one and this policy was priced for taxed vehicles.  In accepting the terms and conditions when buying this policy that had been priced specifically for taxed vehicles, the insured agreed  that cover was dependent on the insured vehicle having valid road tax. 

That would be relevant if it was an issue of non-disclosure, ie if the RAC had asked at the time of purchase "is the car taxed (now)" and you hadn't given an accurate reply. In which case yes, the policy could potentially be invalidated.

However breaching the terms of the policy after you have taken it out (by not keeping the car taxed) is a completely different matter to providing false information before you take it out, and can only be grounds for rejecting a claim if the breach itself somehow contributed to the claim.

The obvious parallel is clauses in car insurance which require your car to have an MOT or be roadworthy - it's well established that they can only be enforced in the event that the condition of your vehicle is a significant factor in causing an accident that you're trying to claim for.

shinytop said

It was easier just to tax the car anyway.        

Indeed, but the information might still be useful for someone who finds themselves in a similar situation.

The fact that they treated you as covered when you did tax it shows that it:s not an underwriting decision BTW. If their objection is that untaxed cars are at higher risk of breakdown, the car doesn't retrospectively become lower risk because you tax it after it has broken down

onomatopoeia99

Aretnap said:

shinytop said:

Aretnap said:

shinytop said:

Stubod said:

..why does charging an extra £160 then make it OK for them to come out?

There is no extra charge. Without road tax, the policy as purchased is invalid. £160 is what they charge anyone without a policy for a tow.      

It's not as simple as that though, for the reasons I outlined already. Had your 'friend' ended up having to pay the £160 the advice I'd have given him would have been to complain to the RAC, and then to the Financial Ombudsman if necessary. His chances of getting his money back would have been good. To justify refusing to honour his policy the RAC would have to have shown one.of three things

(1) His breach of the policy terms (ie his failure to tax the car) caused the breakdown.

(2) It was reasonable to refuse him help, because they'd have been helping him to illegally get his untaxed car back into the road or

(3) The costs of recovering an untaxed car are greater than for a taxed one.

(1) is obviously not true. (2) is hoptheelessly undermined by the fact that they were willing to help him get his untaxed car back on the road if the price was right. That leaves (3) which might just be arguable, but it would depend on the exact circumstances, and it doesn't sound like it featured in their initial justification.

How about (4) The insurer's underwriting decision is that the risk of an untaxed car needing recovery is greater than a taxed one and this policy was priced for taxed vehicles.  In accepting the terms and conditions when buying this policy that had been priced specifically for taxed vehicles, the insured agreed  that cover was dependent on the insured vehicle having valid road tax. 

That would be relevant if it was an issue of non-disclosure, ie if the RAC had asked at the time of purchase "is the car taxed (now)" and you hadn't given an accurate reply. In which case yes, the policy could potentially be invalidated.

However breaching the terms of the policy after you have taken it out (by not keeping the car taxed) is a completely different matter to providing false information before you take it out, and can only be grounds for rejecting a claim if the breach itself somehow contributed to the claim.

The obvious parallel is clauses in car insurance which require your car to have an MOT or be roadworthy - it's well established that they can only be enforced in the event that the condition of your vehicle is a significant factor in causing an accident that you're trying to claim for.

shinytop said

It was easier just to tax the car anyway.        

Indeed, but the information might still be useful for someone who finds themselves in a similar situation.

The fact that they treated you as covered when you did tax it shows that it:s not an underwriting decision BTW. If their objection is that untaxed cars are at higher risk of breakdown, the car doesn't retrospectively become lower risk because you tax it after it has broken down

Is this an opinion based on your reading of unfair contracts legislation, or is it supported by precedent decisions by the FOS not related third party liability in motor vehicle insurance?  Which is not an obvious parallel due to 1988 c.52 section 148 which imposes additional specific restrictions on insurers avoiding liability that do not apply to breakdown or any other kind of insurance.

shinytop

Car_54 said:

Marvel1 said:

prowla said:

I don't think it's the RAC's business whether the car is taxed.

If it's in their T&C's which people agree too, then it is.

Aretnap has already explained above why it is unenforceable in the context of an insurance contract.

As a general point, any contract terms can be struck out by a court as "unfair".

No he hasn't, he has commented that unreasonable contract terms may be unenforceable.  I don't think a term that says a car insured for use on a public road needs to be taxed is unreasonable.  I wonder what a judge would think?  Links to any previous cases related to road tax and breakdown would be helpful.