Existing Insurance on car you no longer own…

[blue al]

Bad mistake on my part
I forgot to cancel insurance on a car I sold,
Mixed up on my part with 2 cars similar reg and one policy directly with Lv and another car with brokers

Car sold in August and policy renewal due next month….
I’m assuming that is is currently insured with new owners, but what …if


A) what would have happened if it was involved in an accident, ?
As I’m no longer the legal owner but hold a policy on it ?

B) as far as I’m aware you cannot have 2 policies on the same car…to avoid fraud and double payments
So have I any chance of a refund ( I guess 140 quid own goal currently) yes I know I’m a muppet…

[davek_964]

blue al said:

Bad mistake on my part
I forgot to cancel insurance on a car I sold,
Mixed up on my part with 2 cars similar reg and one policy directly with Lv and another car with brokers

Car sold in August and policy renewal due next month….
I’m assuming that is is currently insured with new owners, but what …if


A) what would have happened if it was involved in an accident, ?
As I’m no longer the legal owner but hold a policy on it ?

B) as far as I’m aware you cannot have 2 policies on the same car…to avoid fraud and double payments
So have I any chance of a refund ( I guess 140 quid own goal currently) yes I know I’m a muppet…

Any chance of a refund for a policy which renews next month - because you forgot to cancel it 6 months ago?

Er - no.

Just cancel it and write it off as a mistake.

[vikingaero]

blue al said:

A) what would have happened if it was involved in an accident, ?
As I’m no longer the legal owner but hold a policy on it ?

B) as far as I’m aware you cannot have 2 policies on the same car…to avoid fraud and double payments
So have I any chance of a refund ( I guess 140 quid own goal currently) yes I know I’m a muppet…

A) If the new owner or someone driving the car (say it was stolen) had an accident then under certain circumstances parts of the RTA could make your Insurer cover the costs which in a big accident could be hundreds of thousands.

B) You can have 2 policies covering one car, but in the event of a claim, both policies would normally pay out 50/50. However you would now have ONE single incident, but TWO claims and potentially TWO lots of excesses deducted. I can insure your car under a temporary cover policy and these types of policies normally state the temp cover is the overriding cover.

[speedking31]

Doesn't MID flag up to an insurer if there is an existing policy on a vehicle?

[blue al]

speedking31 said:

Doesn't MID flag up to an insurer if there is an existing policy on a vehicle?

This what I thought happened…?

Potentially the same insurance provider could have 2 policies on the same car ?

To other posters It’s cancelled and I have learnt a lesson,
and as I’m not a millennial I don’t “expect” to be refunded.

I just posed the rhetorical question as answered above, Has another policy been sold in the knowledge that it already has continued cover, as some people pay monthly or cancel payments,
and would I, or should I say my insurance provider, have liability if no other cover was in existence.
( they are selling cover for both car and driver, so driven by mr Mago with no license )

Seen on television plenty of people who thought they were insured but had no cover…pulled by the fuzz, would it show up as me, new owner, no cover, double cover etc

[BertBert]

Yes, two policies are allowed on one car, so nothing specifically untoward there.

And yes in theory it is possible that the car had a claim that your uncancelled insurance would have to cover. Whether that has ever happened, who knows.

[paul_c123]

Plenty of scenarios where you could legitimately have 2 policies on one car. For example, a friend/relative's car is borrowed, the owner's insurance doesn't cover other drivers and the borrower's insurance doesn't have "driving other cars" - so they take out a temporary policy or add it on as a temp 2nd car to an existing one. Or, its at a garage and they test drive it, etc etc

If the OP's car were never insured with the current owner, and an accident/claim was made by a 3rd party, there's certain situations where OP's insurance would be obligated to act as insurer. But there's also plenty where they wouldn't be obligated, due to the OP having sold the car and having no "insurable interest" in it any more.

Don't know what happens if there's 2 (or more) entries on MID, I guess it gets looked into further to determine which insurance company is liable and which has a valid get-out or no legal obligation to cover etc.

[Foss62]

Logically, the insurance policy would no longer be valid because the OP would no longer be the owner or registered keeper, so one of the (if not THE) key parts of the contract would have ceased to exist.

As far as I know insurers don’t have any ongoing responsibility for an uninsured vehicle just because they were the previous insurer?

[davek_964]

Foss62 said:

Logically, the insurance policy would no longer be valid because the OP would no longer be the owner or registered keeper, so one of the (if not THE) key parts of the contract would have ceased to exist.

Plenty of (adult) children have their own insurance to drive their parents car. They are neither owner or registered keeper.

[Aretnap]

BertBert said:

And yes in theory it is possible that the car had a claim that your uncancelled insurance would have to cover. Whether that has ever happened, who knows.

It does happen on occasion and can be very unpleasant indeed for the unfortunate former owner.

https://www.dailyrecord.co.uk/news/scottish-news/s...

Someone I knew on another forum was assisting the guy in that story for a while. IIRC the insurer eventually stopped pursuing him. Whether they could have forced him to pay if push came to shove was something that was debated quite a bit - personally I wouldn't want to risk finding out for myself for the sake of a cancellation fee.

[Foss62]

davek_964 said:

Foss62 said:

Logically, the insurance policy would no longer be valid because the OP would no longer be the owner or registered keeper, so one of the (if not THE) key parts of the contract would have ceased to exist.

Plenty of (adult) children have their own insurance to drive their parents car. They are neither owner or registered keeper.

Yes - I know, including my own children. But it’s difficult to see why you think this would be relevant to the OP’s situation? Only a very complex series of actions could have resulted in the OP taking out insurance on the new owners vehicle and he probably would have told us if he wasn’t the original owner/keeper.

[blue al]

Thread spoiler coming …

Swansea knows car is sold and so to currently unrelated to any 3rd party in case of accident.
I wouldn’t have been the driver nor my wife, Only 2 named drivers…
So it would be by default driven by someone without my permission, akin to theft….” Perhaps?”

Ps..
LV coughs up refund to original poster muppet who made genuine mistake,
no chasing on my end, no threat of social media exposure or “shaming “ of company etc,
phone call back within 2 hours of my call after they had checked the database and confirmed my error….
Karma helps out….old duffer “Wins” despite condescending suck it up “support”from some other posters…

[reddiesel]

vikingaero said:

A) If the new owner or someone driving the car (say it was stolen) had an accident then under certain circumstances parts of the RTA could make your Insurer cover the costs which in a big accident could be hundreds of thousands.

B) You can have 2 policies covering one car, but in the event of a claim, both policies would normally pay out 50/50. However you would now have ONE single incident, but TWO claims and potentially TWO lots of excesses deducted. I can insure your car under a temporary cover policy and these types of policies normally state the temp cover is the overriding cover.

I wonder about the accuracy of what you are stating in point (A) namely the certain circumstances part .
I have a few times recently parted with cars without bothering to cancel the Insurance and once with the Insurers knowledge .
The occasion that my Insurer was aware of was simply to allow myself another years NCB . The Policy had only another 3 weeks to run so it was pointless to cancel it early . The other two occasions I was intending to purchase the very same model as I had already insured . Not cancelling the Policy allowed me to simply notify the Insurer by email of the change rather than starting the whole proposal process afresh .
On both of these occasions the Policies had around 4 months still to run and I had no issues changing over . The Insurance Company didn't ask when or if I had sold the older car , I simply no longer required the cover .
I don't believe any Insurance Company would pay out for a car no longer owned by the Insured no matter if they had been informed or not . I would willingly provide them with the Paperwork to prove the change of Ownership should there be an issue .

[reddiesel]

blue al said:

Thread spoiler coming …

Swansea knows car is sold and so to currently unrelated to any 3rd party in case of accident.
I wouldn’t have been the driver nor my wife, Only 2 named drivers…
So it would be by default driven by someone without my permission, akin to theft….” Perhaps?”

Ps..
LV coughs up refund to original poster muppet who made genuine mistake,
no chasing on my end, no threat of social media exposure or “shaming “ of company etc,
phone call back within 2 hours of my call after they had checked the database and confirmed my error….
Karma helps out….old duffer “Wins” despite condescending suck it up “support”from some other posters…

Good for you fella . The trouble with Social Media is its largely populated with those with either no experience of the topic they are commenting on or repeat something second hand riddled with inaccuracies and omissions . I disposed of a 20 Plate Vantage to WBAC without cancelling the Insurance . 5 days later I picked up a 21 Plate Vantage from Aston Cheltenham . I then in Cheltenham swapped the Cars via the Insurers Website on my iPhone . Its as easy as that and I have done this several times . As long as I have proof of the date of my transaction then I have no worry .

Edited by reddiesel on Monday 17th February 21:16

[DP14]

reddiesel said:

vikingaero said:

A) If the new owner or someone driving the car (say it was stolen) had an accident then under certain circumstances parts of the RTA could make your Insurer cover the costs which in a big accident could be hundreds of thousands.

I don't believe any Insurance Company would pay out for a car no longer owned by the Insured no matter if they had been informed or not . I would willingly provide them with the Paperwork to prove the change of Ownership should there be an issue .

Paying out for the car is not the issue, it's paying out for other cars, people or property.

Policies typically have wording such as this: "If an incident occurs which is not covered by this policy and we are required by the law of any country to make a payment, we can recover that amount from you...".

In the bike incident linked, the insurer would have to pay out to the Yaris driver and could then come after the bike seller in turn.

[vikingaero]

DP14 said:

reddiesel said:

vikingaero said:

A) If the new owner or someone driving the car (say it was stolen) had an accident then under certain circumstances parts of the RTA could make your Insurer cover the costs which in a big accident could be hundreds of thousands.

I don't believe any Insurance Company would pay out for a car no longer owned by the Insured no matter if they had been informed or not . I would willingly provide them with the Paperwork to prove the change of Ownership should there be an issue .

Paying out for the car is not the issue, it's paying out for other cars, people or property.

Policies typically have wording such as this: "If an incident occurs which is not covered by this policy and we are required by the law of any country to make a payment, we can recover that amount from you...".

In the bike incident linked, the insurer would have to pay out to the Yaris driver and could then come after the bike seller in turn.

RTA 151 2) b)

Google something like "car sold insurance left running".

[Foss62]

vikingaero said:

RTA 151 2) b)

Google something like "car sold insurance left running".

That's interesting and pretty much defies logic. As is often the case with insurance issues, the correct answer raises many more practical questions. A few that occurred to me:

1. Why did insurance companies ever sign up to this legislation? There must presumably be some benefit to them? Having to Continue (a level of) cover after the contract can be shown to have been broken isn't intuitively a good deal...
2. Why is actual cancellation by the policyholder such a big deal in this arrangement (or is it?)? In the Motorcycle example, if the owner had immediately informed the insurer of the sale, would that have meant that the insurer was off the hook at that point? Or does a policy always run it's original course for the purpose of this law? If the former, then why would breaking the contract (by selling the vehicle) be seen as less definite than phoning the insurer?
3. Why don't we see more examples of this problem (my google search included an insurance lawyer who had only encountered two in an entire career)?
Thousands of people must put themselves in jeopardy over this every single day. Aside from the obvious cases of people who see that the cancellation charge is greater than the amount of premium that would be refunded, there will be others who will let the policy run for NCD purposes; but there will also be many more who (for example) sell to a cash buyer who drives away, their insurers not being contactable until the following morning.
4. From the insurers' perspective, what if the vehicle is stolen? I know from experience that the policy continues (my car was stolen, recovered, repaired and returned to me by my insurers and the policy continued afterwards). Do the insurers carry a massive potential liability (vehicle used to drive into crowd for example) for the period the vehicle is out there, up to the end of the policy?

[Aretnap]

Foss62 said:

That's interesting and pretty much defies logic. As is often the case with insurance issues, the correct answer raises many more practical questions. A few that occurred to me...

Broadly it's so that's there's someone to pay compensation to the innocent victims of uninsured drivers. The (very broad) principle is that the insurer with the closest connection to the car pays. The MIB only pays out of central funds if the car has no insurance of any sort on it.

The alternative I suppose would be for the MIB to pay for everything. But the MIB is funded by levy on insurance companies, so insurers would end up paying for it all anyway.

Yes, the insurer's liability applies even if the car is stolen - though obviously in that case they can't demand reimbursement from the policyholder. That's fine. Insurance companies are big boys, paying claims is what they do for a living and the risk that a few of the cars that they insure will be stolen and crashed by the thieves is a risk that they can factor into their premiums.

I guess the practical impact is that if you own a car that is particularly attractive to joyriders (or terrorists) your premium ends up being slightly higher to cover the risk that your insurer will have to cover some damage or injury caused by the joyrider.

[Foss62]

Aretnap said:

Broadly it's so that's there's someone to pay compensation to the innocent victims of uninsured drivers. The (very broad) principle is that the insurer with the closest connection to the car pays. The MIB only pays out of central funds if the car has no insurance of any sort on it.

The alternative I suppose would be for the MIB to pay for everything. But the MIB is funded by levy on insurance companies, so insurers would end up paying for it all anyway.

Yes, the insurer's liability applies even if the car is stolen - though obviously in that case they can't demand reimbursement from the policyholder. That's fine. Insurance companies are big boys, paying claims is what they do for a living and the risk that a few of the cars that they insure will be stolen and crashed by the thieves is a risk that they can factor into their premiums.

I guess the practical impact is that if you own a car that is particularly attractive to joyriders (or terrorists) your premium ends up being slightly higher to cover the risk that your insurer will have to cover some damage or injury caused by the joyrider.

Thanks for the explanation.

So can that close connection only be ended with a phone call from the insured party (assuming the policy doesn't run it's term)? It's a bit surprising that insurers can't go to the MIB with proof that their customer sold the car, so the contract and close connection was no longer there.

The other possibility I suppose, is that the close connection always applies to the original term unless another insurance replaces it. This might explain why some insurers allow customers to continue a policy after selling a vehicle (to gain NCD etc.). If the jeopardy of an unknown, uninsured new owner would be there irrespective of them cancelling the policy, they have nothing to lose. Otherwise I would have thought that they would run a mile from this scenario.

This might also explain why it is so rare for customers to be affected by the non-cancelling nightmare, even though there would seem like a huge number of 'opportunities' for this to happen. If they are on the hook whether or not their customer informs them, then going after the customer might only occur if they suspect something out of the ordinary has gone on?