Insurance claim for a bike I don't even own - help

-Kerri

Posting on behalf of a friend who isn't on here.
So, they sold a motorcycle in December. Forgot to remove it from their insurance (its a multi bike policy). 
Today they get a call from their insurers. Apparently the person who bought the bike has sold it again and the new owner had an accident and didn't stop.
My friends insurer is trying to pay out for the accident that he didn't even have and its not his bike(?!)
Is this even legal? It sounds ludicrous 

Keep_pedalling

It is legal and the insurance company have no choice but to pay up if the new owner has no insurence, thanks to the road traffic act 1988

https://www.legislation.gov.uk/ukpga/1988/52/section/151

Worse than that it is not just your friend’s NCD that is at risk, his insurance company may try and recover their losses from him

Aretnap

Your friend really should have cancelled the insurance. If there's a live policy on the bike then the law requires the insurer to satisfy third party claims in certain circumstances, even though the actual rider is not covered by the policy - so there is a.route for people harmed by the uninsured rider to get compensation.

In turn the insurer can seek to reclaim their costs from anyone who "caused or permitted" the uninsured person to ride the bike, which MIGHT include your friend.

https://www.whitedalton.co.uk/motorbike-blog/2014/12/dont-leave-yourself-liable/

Personally I would argue that if the bike was sold and resold your friend came be said to have permitted the second buyer to ride it, even if he might have permitted the first buyer. I'm not sure that I would want to stake a huge amount of money in that argument though...

A poster on here a while ago was in contact with the biker in the news story above a while ago and reported that in that case the insurance company eventually stopped pursuing him. I bet he still wished that he'd cancelled his policy though...

DullGreyGuy

-Kerri said:

My friends insurer is trying to pay out for the accident that he didn't even have and its not his bike(?!)
Is this even legal? It sounds ludicrous 

Its not only legal, its what the law requires that they do.

The statutory part of insurance is there to protect innocent victims of accidents. To avoid insurers putting a host of T&Cs in place that enable them to avoid paying out on someone's injury etc the law states that if there is a valid certificate of insurance on the vehicle that insurer must payout even if the policyholder has breached the terms of policy by, for example, selling the bike and not informing them and having a non-named driver ride it and cause an accident. Covers other things like covering business use if they've only insured it for Social, Domestic and Pleasure. 

As others have said, the real issue is that both the law and the contract terms allow the insurer to recover their outlay from the policyholder if they were complicit in the breach of contract. There was a post on here not too long ago where a similar type of incident had happened (thought they'd made the decision not to cancel to avoid the cancellation fee) but were now being required to repay the £40,000 paid out to the victim.