Uninsured Driving - Questions & Answers

Background Information

Claims are dealt with by the Motor Insurers Bureau (MIB) www.mib.org.uk
The MIB is a fund of last resort and so will look to an insurer to deal wherever possible
MIB is funded by a levy on every motor insurance policy taken out currently around £30 per policy. In 1991 MIB took £50m levy from UK motor insurers, in 2005 this levy was £330m. The MIB is not for profit
The amount paid out to Claimants in 1991 was less than £50m, by 2005 it was in excess of £300m
The MIB dealt with 61,376 claims in 2005
In the UK about 1 in 7 drivers will be uninsured, however, there are postcode hotspots throughout the UK For example in one of the “M” postcodes which is the number 1 postcode for uninsured driving, you are 6.75 times more likely to be hit by an uninsured motorist
The general aim is to reduce uninsured driving. Doing this by new police powers to seize a vehicle which is believed not to be insured and scrap the same after 14 days if no production of insurance documents. Police using new number plate recognition cameras to do this. These cameras link into the Motor Insurance Database which stores insurance details for every vehicle in the UK that is insured. The camera will photograph the number plate, which will search the database and if this beeps it is a negative search, the police can stop the vehicle and issue relevant notices. So far in 2006 over 25,000 vehicles have been pulled over using this method, of which about 40% have been scrapped following the owner’s failure to provide insurance documents to the police.
Currently, only vehicles which are being used on the road have to be insured. There are plans to extend this regulation to those vehicles which have been declared to the DVLA as off the road. These vehicles will have to have at least third party insurance.
It is the vehicle which carries the insurance, not the driver, and if the vehicle is insured in most cases those insurers will have to deal with any claims made whether or not they cover the driver himself
Some insurers extend cover to their policyholders in the form of a “driving other cars” extension. This enables the policyholder to drive any other vehicle on a third party basis, however, insurers are beginning to stop this cover as there is evidence that some people are insuring very cheap low spec cars and then driving around in a much higher powered vehicle on this cover. This cover was intended to allow for emergency situations. It also makes it much more difficult to trace uninsured drivers. There is also evidence of people unwittingly driving without insurance when they think they have this cover, as they have had it for years.
Insurers do not offer any period of “grace”. Cover expires on the date stated on the certificate and must be renewed before then to ensure continuity of cover. Urban myth suggests that you are allowed 14 days before your insurance is void. This is not the case.
The MIB have 2 claims schemes – the Compensation of Victims of Uninsured Drivers and the Compensation of Victims of Untraced Drivers

Specific Detail – Uninsured Drivers Scheme

The driver of the offending vehicle must be fully identified and the vehicle uninsured. (If a vehicle is insured, but the driver is not insured for any reason, then generally the insurers will have to pay the claim as part of their responsibilities under the Road Traffic Act 1988. Paying a claim as RTA insurers enables the insurers to try and recover sums paid out from the responsible party/their policyholder)
If a vehicle is stolen, the thief driving the vehicle is apprehended and identified, and the vehicle is properly insured, then the vehicle insurers will have to pay the claim again under the Road Traffic Act. (Unfair on law abiding motorist whose no claims discount suffers as a result?)
A report of the accident must have been made to the police. The claimant must be able to prove the police involvement and so must keep a log number, crime ref number or the details of the police officer who has taken the report. Failure to do this can lead to the MIB refusing payment of the claim
The first £300.00 of any property damage claim, (including vehicle repair costs, damaged items, policy excess), is not payable or recoverable as part of the claim. So, Claimants against the MIB are £300.00 worse off than those who claim against an insurance company Property damage claims are capped at £250K
The MIB will not reimburse insurance companies costs. Claimants who have comprehensive insurance and who have their vehicle repaired by their insurers will in all probability lose their no claims discount, (NCD). The NCD is just that – a discount for not making a claim. It is not a no fault discount. In a claim against an insured motorist, the “at fault” insurance company will reimburse to the other insurers any expenses incurred in connection with the repair of the vehicle. Thus the insurer suffers no loss and can reinstate the NCD
Some claimants try to get around this by not claiming through their own insurance. The MIB get round this by making it a condition that they will not pay any loss which is covered by an existing policy of insurance. So, if the Claimant has comprehensive insurance, effectively they cannot choose not to use that insurance if they wish to have the vehicle repairs paid for
This also extends to other areas – for example, physiotherapy costs if there is a private health policy in place that would cover this, damaged property where there is a household contents policy in place
The MIB will not pay for “claims made for the benefit of others”. So if you are off work, your employer pays you full pay and, in accordance with your contract of employment, expects you to recover it as part of your claim, this will not happen in claims against the MIB. These losses are specifically excluded and you lose your “sick entitlement” under your contract which means if you are ill again you may not get paid. Lots of employers will reinstate sick pay entitlement if they recover their losses.
Again, this extends to other areas, such as recovering costs paid out by private health insurers.
If the Claimant benefits from policies like income replacement, accident cover etc, the MIB have the right to deduct any amount paid out under these policies from the injury compensation. So if a Claimant receives say £1,000.00 from a policy covering injuries, the MIB will deduct this from the final award
The points 4 to 10 are all less favourable to Claimants via the MIB as opposed to Claimants against an insurer. None of these apply to claims made against insurers.
The MIB will require the Claimant to sign an Assignment of rights before they pay out any damages. This allows the MIB to take an action against the uninsured motorist in the Claimant’s name to try and recover the amount paid out. The MIB will foot the bill for the costs of any action taken, however, they will not include any of the losses that the Claimant was unable to recover due to the constraints of the MIB scheme – including the £300 initial deduction
Claimants via the Uninsured Drivers Agreement can use the county court to resolve any disputes over fault for the accident or how much compensation should be awarded in the same way that a Claimant against an insured motorist can, however, the rules for solicitors representing those Claimants against the MIB are very strict and if one of these is not followed the MIB can refuse to pay compensation, which is why it is important to instruct a lawyer who fully understands claims made against the MIB
MIB will not pay a claim made by another uninsured motorist
MIB will not pay claims made by passengers in an uninsured vehicle who ought to have known that the vehicle was not insured, or where the vehicle was being used in furtherance of a crime (very technical arguments – let me know if you want more on this)
The MIB currently have a considerable backlog of work and claims against the MIB take longer than those against insurance companies. As a member of MASS, we have an Agreement with the MIB which allows some claims to be dealt with quicker. Another reason for choosing a specialist solicitor

Specific Detail – Untraced Drivers Scheme

This scheme is for accidents where drivers cannot be traced, either because they have given false details at the scene or because they have left the scene without giving any details.
The accident must have been reported to the police as soon as is practicable after the accident – maximum time of 5 days, where property is damaged and 14 days for injury only claims.
All the exclusions above in relation to insurance company costs, claims for the benefits of others, payouts from insurance policies still apply
The MIB will only pay for property damage claims where the registration number of the offending vehicle has been taken and can be supplied. It is subject to the same £300.00 deduction
Where there is no registration number, property damage claims are not payable and the only damages that can be claimed are for personal injuries and related expenses, such as medical costs and loss of earnings
Because the driver is not traced, court proceedings cannot be started to resolve any dispute between the Claimant and the MIB
Any disputes are resolved by means of Arbitration. This involves an independent Barrister, usually a QC, reviewing the papers and reaching a decision. He looks at the matter afresh, which means his decision could be less favourable than the MIB’s original decision
Legal costs are not paid by the MIB for untraced driver claims. A contribution is made towards these costs of a minimum of £500.00 plus VAT and expenses, such as medical evidence. A solicitor may bill you for any additional work not covered within this figure. In cases which do not go to Arbitration Stephensons do not bill for any additional amount on top of the figure paid by the MIB
Arbitration costs are not paid for by the MIB, even if the appeal is successful. The Arbitrator will consider the reasonableness of the appeal when deciding whether to ask the MIB to pay any legal costs. The Arbitrator’s fees alone are in the region of £600.00, plus solicitors fees
The MIB have serious delays of work, which leads to these claims taking in the region of 18 months to 2 years to resolve
A claim under the untraced Agreement for injury must be lodged within 3 years of the accident date, even if it involves a person under the age of 18. (a person under 18 who has an accident has until their 21st birthday to lodge a county court claim for damages) A claim under the Agreement for property damage must be lodged within 9 months of the accident date

What to do after an accident

Take photos where possible of the vehicles position, damage and registration number. Try and get the driver into the pictures so that he can be identified if necessary
Do not allow the other driver to leave the scene without providing his full name, home address and landline telephone number. If he has anything to prove his identity take a note of this. Ask him for his insurance details
Take note of the other driver’s appearance, so that you can describe him if you later need to for identification
If the other driver is reluctant to provide any details, call the police and insist that they come out to the accident scene. (if injured you are obliged to report the accident to the police in any event) Explain to the police your concerns
Have a look at the vehicle, is there a tax disc, is it valid? Uninsured vehicles tend also not to be taxed or have an MOT. Again if something is not in order call the police
If the driver leaves the scene without providing details report the matter immediately to the police. Try to get down the registration number of the vehicle
If it becomes clear that it is going to be MIB matter instruct lawyers who have MIB specialists

Sheryl Chadwick