An innocent action to save a few quid could end up costing you absolutely everything
I sold my Triumph Daytona 675 for cash to a guy from Eastern Europe, and as I only had a month left on the insurance I decided to let it run on to get a further full year’s no claims bonus.
I told the DVLA and I got an acknowledgement that the bike had a new owner so I did not think I had any problems. Unfortunately, the guy who bought it hit and injured a pedestrian. I don’t know the circumstances other than the guy that bought it had no valid insurance and no British motorcycle licence.
My insurers have said they have to pick up the costs and damages to the pedestrian who I understand was pretty badly smashed up. The buyer has now skipped off to somewhere Baltic.
My insurers have said that they will be coming after me for the money as I kept the bike “on risk” with them. My wife is worried sick. I am too. Am I liable for tens of thousands of pounds?
The bad news is I think you are – you’re right to be worried sick. As a matter of statutory law (the Road Traffic Act 1988) the insurance policy affixes to the bike and any rider. Even a thief is deemed to be an insured rider.
As you made the conscious decision to let the insurance continue, your insurers are liable to the third party by reason of statute law. However, you are in fundamental breach of your contract with them and they can come after you for the money. You have left them with a legal duty to shell out for every penny and legal costs the injured pedestrian is going to get.
I know you didn’t mean to and if the new rider had been insured, none of this would have happened, but he was not insured and this has happened. Your bike insurers will probably take a commercial view on whether it is worth coming after you. If they do, then unless you have a few tens of thousands pounds to hand you could well be facing personal bankruptcy. You are in deep trouble and there is no easy answer.
I’ve been on the other side of the fence, when I’ve acted for motorcyclists who have either been injured or killed by the driver of a vehicle who doesn’t have insurance in that vehicle, but somebody else does, and I can tell you that insurance companies take a pretty hard, cold and calculating line on whether or not you are worth coming after.
I think the only saving grace that you have is your house is jointly owned between you and your wife, and if I were you I would be speaking to a Solicitor pretty quickly about making sure that your wife’s interests in the house are protected.
It is never a good idea to be anything other than 100 per cent straight with your insurance company. The rules are all on their side, they know exactly what they are doing and their sole duty, in reality, is to protect their shareholders. That no claims bonus is gone and could well be eating you everything you own.
Fast Bikes September 2012