Frightening but it happens..

[Oldrat]

Have you sold a vehicle and let a policy lapse because there’s only a few days left?

I thought I’d use the forum to educate some about a circumstance that might cost a policy holder dear.



Here we go..
1. You own and insure a vehicle
2. With a week (ish) left on the policy you sell the vehicle.
3. Perhaps because it’s too much bother and there are only a few days left on the policy you fail to notify the insurance company of the sale.
4. The new owner unfortunately doesn’t take out insurance at the time they drive it away maybe, they’ll intend to insure it next week.
5. During this time, the new owner has a crash causing serious injuries to others before they’ve put insurance in place.


Who should the injured parties claim from?

Options
1. Sue the new owner personally.

2. Get the Motor Insurers Bureau (MIB, a pooled insurance company fund) to payout for the uninsured claim.

3. Claim against the previous owner…you!


Answer below…











Answer 3
There is a current insurance policy still in force because you didn’t close it, so the company are obliged to cover third party claims.

And the icing on the cake, the insurance company can sue you personally to recover costs because you failed to reasonably notify them of a change in circumstances.

The same thing applies if the vehicle is stolen, if yours is the only policy in place at the time, even though you don’t own the vehicle anymore, the claims will sit with that policy and ultimately you personally.


Morale- notify all changes promptly.

 

[dubber36]

I suppose that until DVLA have updated the keeper records, it's still your vehicle, insured to you and you have allowed someone else to use it without being satisfied that they are legal to do so.

We've all seen Police Camera Action etc. Young lad gets stopped in Dad's car that he's not insured for. He's asked if Dad gave him permission to drive it or did he take it without consent. Lad say's Dad told him it was OK. Dad gets in the shit.

 

[Oldrat]

Not quite.. nowt to do with the DVLA.

Even if the DVLA update the keeper database, if the new owner doesn’t insure, and there is a claim, your policy is still in force because you haven’t cancelled it.


If yours is the ONLY policy in effect that is where the claim sits

 

[Sackmycook]

Clearly a difference in civil and criminal aspects of the scenario. The Police and CPS would still pursue the uninsured driver for having no insurance.

 

[Trouts]

i guess more people would be inclined to do this if the insurance company didn't charge you an 'admin' fee...

 

[Bigsidavies]

I suppose that until DVLA have updated the keeper records, it's still your vehicle, insured to you and you have allowed someone else to use it without being satisfied that they are legal to do so.

We've all seen Police Camera Action etc. Young lad gets stopped in Dad's car that he's not insured for. He's asked if Dad gave him permission to drive it or did he take it without consent. Lad say's Dad told him it was OK. Dad gets in the shit.

No, ownership and title pass at the time of completion of the contract. ie when payment is made in full.
V5 has nothing to do with it.
In fact it used to say ‘This document is not necessarily proof of ownership’ on the V5

 

[russ_e]

Having worked for a lloyds syndicate for a few years I can honestly say that I never heard of an insurance company trying to recover costs from a policy holder that had not cancelled their insurance after the sale of a vehicle.

The insurer could of course be liable under the Road Traffic Act for third party claims but again I never saw or heard of a claim against a policy holder for this.

However, I did see lots of claims under the RTA when a car is stolen but again I never heard of recovery against a policy holder, even if it was their family that stole the car.

 

[Sackmycook]

The above is correct. A previous keeper has no obligation to ensure the new keeper or owner has insurance to do so once payment is made

 

[Bigsidavies]

Have you sold a vehicle and let a policy lapse because there’s only a few days left?

I thought I’d use the forum to educate some about a circumstance that might cost a policy holder dear.



Here we go..
1. You own and insure a vehicle
2. With a week (ish) left on the policy you sell the vehicle.
3. Perhaps because it’s too much bother and there are only a few days left on the policy you fail to notify the insurance company of the sale.
4. The new owner unfortunately doesn’t take out insurance at the time they drive it away maybe, they’ll intend to insure it next week.
5. During this time, the new owner has a crash causing serious injuries to others before they’ve put insurance in place.


Who should the injured parties claim from?

Options
1. Sue the new owner personally.

2. Get the Motor Insurers Bureau (MIB, a pooled insurance company fund) to payout for the uninsured claim.

3. Claim against the previous owner…you!


Answer below…











Answer 3
There is a current insurance policy still in force because you didn’t close it, so the company are obliged to cover third party claims.

And the icing on the cake, the insurance company can sue you personally to recover costs because you failed to reasonably notify them of a change in circumstances.

The same thing applies if the vehicle is stolen, if yours is the only policy in place at the time, even though you don’t own the vehicle anymore, the claims will sit with that policy and ultimately you personally.


Morale- notify all changes promptly.

Is this something that has happened or is happening to you personally @Oldrat or have you read this somewhere?

 

[Oldrat]

Personal knowledge from my professional dealings with insurance companies.

For me it’s about educating folks so that they make conscious decisions, not fall into a situation without thought.

I’d be the first to admit that the likelihood of all the stars aligning are very slim.

But …… so are the chances of winning the lottery, although someone does.

 

[DaveD]

Well worth bearing in mind, why take the risk?
I've never been charged an admin fee for terminating a policy, possibly I've been lucky.

 

[Trouts]

Well worth bearing in mind, why take the risk?
I've never been charged an admin fee for terminating a policy, possibly I've been lucky.

a few years ago Direct Line told the wife it would cost an extra months policy payment to cancel her insurance at the time...

 

[Oldrat]

Just a point of order that occurs to me…

With a very short time left on the policy, supposing you merely told the insurance company that you no longer own the vehicle and that it’s up to them if they want to change the content of policy…

I wonder if that would absolve you of
a) any liability
b) any admin costs

I doubt it but it was just a thought.

 

[Jay586]

I was a consumer rights advisor years ago & we did have a case where a kid had taken parents' car & had a crash into someone else. The injured party's insurer were pursuing the parents personally as their insurance had said they were not covered. It was for a lot of money as they were badly injured & the insurance were seeking redress of all costs.

One of the reasons you'll see me take exceptional care with insurance, when I can be a bit lax otherwise.

 

[Spaghetti]

Well worth bearing in mind, why take the risk?
I've never been charged an admin fee for terminating a policy, possibly I've been lucky.

I had this very situation where there were a couple of days left, and the admin fee was so high that it would have cost me money to cancel it, even taking into account the theoretical refund for the few days left.

I told them to stuff it, and they waived the cancellation fee.

 

[TEESIXY]

Not quite.. nowt to do with the DVLA.

Even if the DVLA update the keeper database, if the new owner doesn’t insure, and there is a claim, your policy is still in force because you haven’t cancelled it.


If yours is the ONLY policy in effect that is where the claim sits

Some insurance companies insist that a vehicle has to be taxed for the insurance to be valid, so i would have thought that if you had notified DVLA of a change of owner, the vehicle has become untaxed and the insurance could be void.

 

[Aggers]

Not a van but bike insurance must be the same. Whitedalton are the go to specialist motorbike solicitors

I sold my bike but didn't cancel my insurance - White Dalton Motorcycle Solicitors

I sold my bike through a classified ad. The guy bought it, didn't test ride it and took it away in a van. I sent off the log book and didn't think any

www.whitedalton.co.uk

 

[dubber36]

Some insurance companies insist that a vehicle has to be taxed for the insurance to be valid, so i would have thought that if you had notified DVLA of a change of owner, the vehicle has become untaxed and the insurance could be void.

That can't be right. If you SORN a vehicle and it gets stolen from your garage, it won't be covered?

 

[TEESIXY]

That can't be right. If you SORN a vehicle and it gets stolen from your garage, it won't be covered?

From confused.com website-​

Is car insurance valid without tax?​

Your car insurance might be valid even if your car isn’t taxed. Some insurance companies may have it as a condition of insurance though, so it’s important to check your policy

 

[DaveD]

Your car insurance might be valid even if your car isn’t taxed.

Makes no sense whatsoever, sounds like nonsense to me anyway.