Many riders will have heard about Paul Duffy’s horrible case. According to the news reports Paul sold his bike to a rider who (unknown to Paul) was not only uninsured but banned. The new owner was involved in a crash that killed him, but Paul hadn’t cancelled his insurance policy. Paul’s insurers will pay out for the injured car driver and his losses, but Paul’s insurers have told Paul they will be coming after him for their outlay, which might be substantial. Bike forums were on fire with people railing against the injustice and lots of heartfelt but patently wrong advice was given by people who did not know the law. If you don’t know the story, Google “Paul Duffy motorcycle insurance” for a depressing read.
This has become a much more common occurrence. All insurance policies are held on a computerised database called MIDIS – all insurers and most solicitors have access to it, and it takes about two minutes to find out who insures a vehicle. As a matter of law, an insurer covers a vehicle for all third-party risks, so the banned rider was covered by Paul’s uncancelled policy. As Paul hadn’t cancelled his insurance his insurers had indicated they would be looking to Paul to pay back their outlay as Paul had “allowed” his insured bike to be used.
In more than 20 years of practice, I had come across this problem twice, both times with a car that had been sold and had struck a motorcycle. But in the last two years I have come across this problem again twice, both times involving motorcyclists whose recently sold bikes had been involved in accidents with an uncancelled policy. It’s a real and increasing problem.
So once you sell your bike, even into the trade, cancel your policy as soon as you sign the V5C logbook and hand the keys over.
I may be overcautious, but I would also ask, as the trade does, for a policy of insurance before you hand the bike and keys over. Also, there is a specific criminal offence of allowing your own vehicle to be used while the rider is uninsured. A genuine buyer will have insurance in place.
RiDE Magazine January 2015