Breakdown cover and road tax

Aretnap

onomatopoeia99 said:

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.

The latter. The Insurance Act 2015 specifically deals with terms and conditions in insurance policies which are not relevant to the loss being claimed for. The general unenforceability of clauses in motor insurance relating to MOT certificates stems from that, and has nothing to do with s148 of the Road Traffic Act.

For one of many examples of FOS decisions on the subject which have nothing to do with third party liabilities see https://www.financial-ombudsman.org.uk/decision/DRN3356893.pdf

shinytop

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

It was a concession.That's what the call handler said anyway.

Car_54

shinytop said:

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.

I think he went further in a previous post, in that it is unenforceable unless the breach of the term actually caused (or contributed to) the breakdown. He has subsequently pointed out that this practice is explicitly prohibited by the Insurance Act 2015 (section 11(2))..

As an aside, any vehicle used on a public road is subject to hundreds of legal requirements, including the tint of the windows and the correct spacing of the characters on the number plate. It's difficult to see the logic in singling out its tax status from all the others, and arguably unreasonable to do so.