I will look at one narrow area of the system, consider your own rights and hopefully it will steer you through the early process should the unthinkable happen.
Let me start at the very beginning. Us bikers love our bikes; so, the first thing we usually do after an accident is usually check the state of our beloved motorcycle.
I kid you not, I have watched a GoPro video of an accident (in which the biker broke his leg) where he immediately jumped up and picked his beloved motorcycle up, putting it on its side stand. All fuelled by adrenaline, which then wore off, and he crumpled to the floor, badly injured.
Us bikers then call our insurance company. Herein lays some potential trouble. Most of us insure our bikes fully comprehensively. This means that we can ask our own insurer to repair, or write off our machine, paying us the market value.
This doesn’t always happen for two reasons:
1. We have a natural inclination NOT to want to claim on our own policy and damage our no claims history. Rather we want to claim against the ‘wrongdoers’ insurer; and
2. Your own insurer may have an agreement with third party company, who you are forced to use in the event of a claim.
Naughty Insurers
Despite paying for the extra protection of a fully comprehensive policy, your insurer may never deal with your bike claim, rather passing you onto whoever they have an agreement with. This other company is a completely separate legal entity and not someone you will have contracted with when you purchased your insurance policy. I won’t name any particular company.
Let’s just stop there for a moment. Reflect on what I just said. Your insurance company takes a premium from you. Your insurer never, ever has to pay out for your damaged bike. Why? Well, because it is farmed out to a third-party company. What a brilliant business model, take a premium and never pay out.
Third Party Companies
What is their angle, I hear you gasp. Well, these companies take your broken bike away. They offer to inspect it, repair it or if it is a write off, may even buy it off you.
It all looks too good to be true. No money up front and all this work is done for you.
In return you agree to sign their terms of business. This means you become liable for storage charges, recovery charges and they’ll even give you a hire bike, whilst yours is off the road.
Except this is done on a ‘credit hire’ basis. Read the small print. I have seen these ‘free bikes’ costing upwards of £150.00 per day.
There is then a perverse incentive to make sure your bike takes weeks, or months, to inspect. Why? Each day that passes it is accruing storage charges at £22.00 per day. This is how they make their money.
It also means you stay on the credit hire bike for longer; I have personally taken over a file from another law firm where the client was liable for £17,000.00 worth of credit hire charges!! His damaged bike was worth £6,000.00.
Let’s not forget your insurer is quite happy with this arrangement, as they never pay out a penny or incur any cost themselves during this process.
When things go wrong
At the end of this process there is a big fat bill. This bill may consist of a hybrid of charges, credit hire bike, top box hire, waiver excess protection etc. Legally, you must be responsible for these charges. If you were not the company that gave you all these benefits cannot recover them against the ‘wrongdoer’ or their insurer. This does cause some tension, of course, as the wrongdoer’s insurer doesn’t want to settle the bill in full and might ask perfectly legitimate questions such as ‘did the biker NEED a bike?’ and ‘does the biker have money in the bank?’. The issue being, if there was no need for a hire bike (because you have a second bike or access to a car) then why was one hired? If you have funds and are not impecunious then you probably won’t qualify, in the eyes of the law, as needing to hire on a ‘credit’ basis. Credit being the issue here, it is vastly more expensive than regular hiring. You are always liable, so if this bill isn’t paid, the company can pursue you for it.
What should you do?
Take advice. If you take independent advice early on, you go into the process with eyes wide open. The above might work perfectly for you, but don’t forget a qualified solicitor must put your interests first, not their own, or those of any third-party companies. You can then decide what the best course of action will be for you should the unthinkable happen.
Gavin Grewal
TVAM Slipstream