Insurers won't pay out

Catbells

I bought a hybrid car 18 months ago.  Since then I have had it MOTd but didn't know I had to register it for car tax - even though I don't actually pay any road tax .    I've had a scrape and spoke to someone at my insurers who told me any claim would be invalid because it isn't tax registered.   Is this right?  

jacko74

Unfortunately I believe it is the case that owners of zero road tax cars still have to go through the same process with the DVLA each year as cars that do pay tax.

Seems like rather pointless and unnecessary bureaucracy to me.

Have your insurers actually cancelled your policy as a result of this or just declined the claim?... Hopefully it's the latter or you could have big problems getting further insurance if the have cancelled your policy altogether

facade

You need to read the teenie tiny small print of your policy.

If there is a clause such as this then you would be contacting the ombudsman over unfair terms & conditions since being untaxed does not alter the material risk that they are insuring.

It is not unusual for an untaxed vehicle to be driven on the road- for example to an MOT appointment, as you can't tax it without an MOT, and it has been ruled that they can't use lack of an MOT as grounds to refuse to pay out- only to reduce the amount as a car without MOT is worth less than one with.

Tax would be similar, except an untaxed vehicle is worth the same as a taxed one, as all vehicles are untaxed when they are sold (any tax expires at the instant of sale and the new owner has to tax them).

Catbells

jacko74 said:

Unfortunately I believe it is the case that owners of zero road tax cars still have to go through the same process with the DVLA each year as cars that do pay tax.

Seems like rather pointless and unnecessary bureaucracy to me.

Have your insurers actually cancelled your policy as a result of this or just declined the claim?... Hopefully it's the latter or you could have big problems getting further insurance if the have cancelled your policy altogether

They haven't cancelled it but it renews tomorrow and I'm going through quotes with fine toothed comb after this.  Its likely to cost me £1000 to have damage repaired.  It really doesn't seem fair given that I was MOTd and insured.  

TooManyPoints

This decision by the insurance ombudsman may help:

https://www.financial-ombudsman.org.uk/decision/DRN-3123029.pdf

It concerns a motorist who had a scrape whilst his car had no MoT, but the principles hold good for your case. The ombudsman said this:

“The relevant guidance we’ve applied to this case is from the Insurance Conduct of Business Sourcebook: ICOBS 8.1.2. In summary, this section says an insurer can only decline a consumer claim due to a breach of policy condition if it’s material to the loss.”

Clearly your vehicle not being registered for zero rate VED is not material to the loss incurred. Get back to your insurers and quote this decision to them. If they still turn down your claim, go to the insurance ombudsman yourself.

Catbells

Thats very helpful and gives me a bit more confidence and ammo to keep on at the insurers for recompense.  Thanks so much.

Aretnap

I'm pretty sure I've never seen an insurance policy that required the car to be taxed, and even if one did have such a clause it could only be grounds for rejecting a claim if the lack of tax somehow played a part in causing the accident as TooManyPoints says.

I suspect that you list have spoken to a fairly junior person at the insurer who was speaking out of turn, and it should be rectified quite quickly if you speak to them again and push to speak to someone more senior. If they stick to their guns the Ombudsman will ultimately side with you.

sheramber

Has the car ever been registered to you ?

If not, than rather the probelm being that car is not taxed it couid be that you were not the registered keeper.

comeandgo

jacko74 

Have your insurers actually cancelled your policy as a result of this or just declined the claim?... Hopefully it's the latter or you could have big problems getting further insurance if the have cancelled your policy altogether

I have just had a car insurance cancelled, I’m going through ombudsman to try and get it reversed but I’ve got other car insurance and home insurance with no problems and no noticeable price increases.  I’ve had to phone and explain to companies why it’s been cancelled but it has made no difference.

Catbells

sheramber said:

Has the car ever been registered to you ?

If not, than rather the probelm being that car is not taxed it couid be that you were not the registered keeper.

Yes  I'm the registered keeper on the insurance policy.

Brie

Catbells said:

sheramber said:

Has the car ever been registered to you ?

If not, than rather the probelm being that car is not taxed it couid be that you were not the registered keeper.

Yes  I'm the registered keeper on the insurance policy.

But are you registered as the keeper with DVLA?  If so I wonder why you didn't get a tax renewal reminder.