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Why is it not a MOT requirement to have vehicle tax?
Comments
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Insurance companies can (and often do) make conditions so the requirement for a vehicle to be taxed and with a current MOT sounds quite reasonable.
It is not reasonable because neither alters their risk.
Legally you are required to tax, Insure and MOT a vehicle so why argue about it.
Indeed. But it is not an insurer's job to police it or enforce it via policy conditions.
It has been established both by statute and by case law that that making a policy conditional on the vehicle being taxed and/or having a valid MoT is not enforceable.
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AA Insurance certainly has such a condition - section 16.1.2.
"You must have a valid Ministry of Transport (MOT) test certificate if required by law."
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I have never come across one and, possibly more relevantly, I have dealt with many claims where a vehicle wasnt MOTed and never had a third party insurer state there was no cover as a consequence. The later being more relevant as I have dealt with 100+ more different third party claims handlers than insurers I've worked on motor for.
Claude was only able to find IPIDs that say you must have a valid MOT but when you look at the actual terms and conditions none mention MOT as a condition. For example Hagerty's actual policy book only mentions MOT in the definition of Market Value saying its MOT status can impact the value.
A check on the Financial Ombudsman website does indicate a couple of insurers, Tradewise being one, however in the first case where the vehicle was stolen from parked the ombudsman did not uphold the case stating that it was unfair given it was irrelevant beyond the vehicle valuation. The other cases on the first 3 pages of results are all disputes on the discount applied for not having a valid MOT or are about breakdown claims being declined.
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There are numerous examples of the Financial Ombudsman upholding appeals where an insurer had a policy condition that a valid MoT was in force and went on to refuse a claim by virtue of that condition. Here’s just one:
Some relevant passages from the decision:
When One Insurance received the documents it required to finalise payment of the claim, it became apparent that the car did not have a valid MOT certificate. One Insurance therefore rejected the claim and considered the policy had been invalidated, as it said the car was not legally allowed on the road at the time of the incident. It cited its policy terms which state:
“You must have a valid Department for transport test certificate (MOT) for your car, if one is needed by law: and
Vehicle tax disc unless your car has been declared off the road in accordance with the statutory off road notification.”Mrs K has said that she does not dispute that there was no valid MOT for her vehicle. She also says that she accepts that this is a breach of the policy condition. She says however that the breach is not relevant to the loss and therefore should not be used to reject the claim.
One Insurance says that Mrs K’s car was illegally on the road, as it required an MOT, and I would stress that I do not condone any failure to comply with relevant legal requirements. However, with respect to the operation of the motor insurance policy, I have seen nothing to show that the condition of Mrs K’s car made it unroadworthy or contributed in any way to the accident (or that it would not have passed an MOT had it been tested). [my emphases]
For the reasons above, it is my final decision that I uphold this complaint.
In short, insurers cannot reject claims based on policy conditions that are not material to the accident. If they do have such conditions and attempt to use them to deny claims, they can expect to see rulings go against them.
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Well the named firm is of little surprise… presumably this is an old case given the reference to a tax disc
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Kingfisher likewise
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Same month the discs stopped being issued ?
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It's no surprise that they attempted to avoid payment. But it is equally no surprise that the Ombudsman ruled against them.
It was from 2014. But there's plenty more. Here's one from 2020:
From 2021:
Decision Reference DRN-3123029
From 2024:
Decision Reference DRN-4788002
Here's another from 2024 which involved both MoT and VED:
Decision Reference DRN-5259174
The enduring theme throughout all of these decisions (and others) is that insurers cannot deny cover simply on the basis that a policy condition has not been complied with. In the last one of those I provided, the Ombudsman says this:
"I’ve thought about this and considered the rules under which an insurance company carries out its claims handling. The regulator, the Financial Conduct Authority (‘FCA’), has set out rules and guidance contained in the ‘Insurance: Conduct of Business Sourcebook’ (ICOBS’).
The relevant section, ICOBS 8.1.1, provides that insurers must not unreasonably reject a claim. ICOBS 8.1.2B provides that rejection of a claim for breach of a condition or warranty:
“… is unreasonable unless the circumstances of the claim are connected to the
breach.”"Rejecting a claim solely on the basis that no MoT is in force – even if that is a policy condition – is unreasonable.
Hopefully that puts this to bed.
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*** Rejecting a claim solely on the basis that no MoT is in force – even if that is a policy condition – is unreasonable.***
In your opinion -
As I said *** Insurance companies can (and often do) make conditions ***
Which makes it all the more important to read the Terms & Conditions *** Just because it said Black was White last year does not mean they have not not changed their minds this year - and we all know Insurance Companies are altruistic - NOT
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It's worth adding that while the Ombudsman decisions tend to quote ICOBS, the principle that an insurer can't decline a claim due to breach of a policy term that is not relevant to the actual loss is also firmly written into statute law, specifically the Insurance Act 2015
https://www.legislation.gov.uk/ukpga/2015/4/section/11
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