Cancel Your Insurance

[green_machine]

Don't know how many of you guys have read the latest Fast Bike, very interesting article in the law section. Seems if you don't cancel your insurance policy when you sell your bike, you can be personally liable should the buyer be uninsured.

Person sold his bike, thought he'd leave the insurance running another month to get a years no claims. The person who bought the bike was never insured and had an accident. Because the seller kept his insurance going the insurance company had to pay out for the accident which involved a heavily injured pedestrian and are now coming after this guy for the money. He stands to lose everything, house included, and by the sounds of it the legal team said it is pretty clear cut.

 

[reddevil007]

Harsh but true. If claim occurs then it will fall to the insurer that is shown as currently insuring the vehicle, in the case described the guy that had sold the bike. Due to him not cancelling his policy his insurers have unwittingly become required to deal with any third party claim and therefore are entitled to seek recovery from him as its his actions (or failure to act) that has left them liable. Same goes for car, van, truck insurance etc. Be warned

 

[jamie]

wow!! good to know

 

[unionjack]

Blimey I done this maybe once before. I shall be straight on the phone in the future.

 

[reddevil007]

The insurers cause this problem because usually after 8 months of cover you will not get a refund if you cancel yet if you are building up your no claims discount those last 8/9 months count for nothing. I have worked in this poxy industry for over 25 years and I have certainly done this rather than loose that extra years ncd. Wouldn't do it again.

 

[green_machine]

Wonder if the bike/car etc was modified and the insurance was invalidated like that?

 

[reddevil007]

Wonder if the bike/car etc was modified and the insurance was invalidated like that?

If a vehicle was modified and insurers weren't aware, in event of a claim they could refuse to pay your damage, they could void the policy but ultimately they would be liable for any third party injury claim which they could then look to recover against you. Trying to get any sort of insurance in the future would then be extremely difficult and expensive as you would have to declare that you had previously had a policy voided etc. in reality it would be down to the mods not declared, their impact, if any,on the claim and then a sympathetic insurer.

 

[DangerousDave]

Oh so true about cancelling the policy, I've seen loads of issues about it.

As for the subsequent points, whilst the strict law is clear cut about an insurers ability to avoid the policy "ab-initio" in the event of any non-disclosure (in effect the policy never existed), this is modified by the the FSA's codes of practice (ICOBS) which states that an insurer cannot void if the policyholder could not reasonably have been expected to disclose. Another thing a lot of people miss is that ICOBS goes on to state that an insurer cannot reject a claim for failure to meet a condition if it has no bearing (material) to the loss suffered.

So for example, it could be a condition of cover that your bike has a valid MOT (usually written as 'roadworthy condition'), but if the bike was stolen the MOT has no bearing on some scally nicking your bike so they would have to pay... albeit the end settlement would be reduced to reflect the bikes condition.

Legal bit over, and back on topic..

 

[bananaman]

Am i right in saying that if i sold my bike and told my insurer that it was sold but kept policy active then i would still be liable? Or cant i keep the policy active without insuring another bike

 

[DangerousDave]

Once you have sold the bike there is no subject matter of the contract.

Speak to your insurer they will normally agree to put the policy on hold until you get another bike... within a reasonable amount of time mind you.