Observer Insurance

[TripleS]

....and this could lead to a criminal prosecution for driving without insurance.

I thought if you had paid for insurance you were at least covered third party?

Only if you comply with the terms and conditions of the policy that you have purchased. Any breach such as failing to tell your insurer about a change of use or any other material fact, leave you with no cover whatsoever.

Are you sure about that? I didn't think insurance companies could legally withdraw third party cover. From what Von has said previously (in other topics) they would pay out at the time, and then sue the policyholder to recover it.

Best wishes all,
Dave.

[martine]

[Clearly any driver must therefore take care to instruct all passengers to pay no attention to the driving, and in no circumstances do any thinking about it.

(probably best if anyone's seen one of my demo drives )

For any IAM Obs and members reading this I will be contacting HQ to try and get a clear statement re Associates driving their own car while being observed. If I manage to get one (!) I will post the 'answer' here. At best I guess it's likely to be 'the associate must inform their own insurance company they are undertaking advanced guidance....etc etc.

The other situation (Obs giving a demo drive) is already about as clear as it can be from the IAM's point of view - see the suggested letter above.

[MGF]

....and this could lead to a criminal prosecution for driving without insurance.

I thought if you had paid for insurance you were at least covered third party?

Only if you comply with the terms and conditions of the policy that you have purchased. Any breach such as failing to tell your insurer about a change of use or any other material fact, leave you with no cover whatsoever.

Are you sure about that? I didn't think insurance companies could legally withdraw third party cover. From what Von has said previously (in other topics) they would pay out at the time, and then sue the policyholder to recover it.

Best wishes all,
Dave.

Which means the insurance company isn't covering you for 3rd party risks. They are covering the third party.

It just means your insurance company may sue you instead of the 3rd party.

[TripleS]

I didn't think insurance companies could legally withdraw third party cover. From what Von has said previously (in other topics) they would pay out at the time, and then sue the policyholder to recover it.

Best wishes all,
Dave.

Which means the insurance company isn't covering you for 3rd party risks. They are covering the third party.

It just means your insurance company may sue you instead of the 3rd party.

Aye I suppose so. A big claim would very likely bankrupt most policyholders in that case - which is not much help - except to the third party - if that's how it works.

Best wishes all,
Dave.

[Porker]

....as I haven't been an observer for quite a while.

Frankly, none of us are going to be observers if this continues in the direction it seems to be heading.

P.

[martine]

Frankly, none of us are going to be observers if this continues in the direction it seems to be heading.
P.

Yes this type of nit-picking without looking at the huge benefits of anyone/everyone taking advanced instruction (sorry guidance!) really p**ses me off. It's beurocracy and people covering their arses rather than making sensible policy for the benefit of road safety...hey...lets not mince words here, people will...are dying because they are not taking further driving tuition (sorry guidance!!!!).

Everyone involved (IAM, DSA, Insurance Cos) need to make it as attractive and easy as possible to get further tuition (really sorry, GUIDANCE!).

<Phew...takes breath and makes mug of hot chocolate>

[michael769]

Are you sure about that? I didn't think insurance companies could legally withdraw third party cover. From what Von has said previously (in other topics) they would pay out at the time, and then sue the policyholder to recover it.

Best wishes all,
Dave.

This used to be the case under an agreement with the govenrment which also included an additional 30 days of insurance to the minimum required by the RTA (known as 'Act' insurance - standard third party insurance exceeds the requirements of the RTA), after expiry of a policy.

This was discontinued for policies starting on or after April 2005 (although many companies kept it up for some months after this) - due to the increasing number of drivers misusing this concession.

Under another agreements with the goverment, all policies include a levy that is paid to the MIB http://www.mib.org.uk/Default.htm. If the driver's insurance is disallowed third parties, who are not covered by another insurance policy can obtain a compensation payout via the MIB scheme. The MIB will then sue then offending driver.

Although the third parties do get their payout just as if the driver had valid insurance, this does not change the fact the legally the driver was driving without insurance and can be prosecuted as such. Clearly it is a matter of the police and CPS (or Procurator Fiscal in Scotland) to decide if such a prosecution would be likely to be successful or in the public interest.

[firstmk1]

I think it's very telling that the IAM insurance scheme specifically includes the following:

- FREE cover for IAM approved Observers conducting a demonstration in their own vehicle;
- FREE cover for IAM members using their vehicle in connection with voluntary or charity work.

Why would they offer this unless the IAM have asked them to?

[martine]

I think it's very telling that the IAM insurance scheme specifically includes the following:

- FREE cover for IAM approved Observers conducting a demonstration in their own vehicle;
- FREE cover for IAM members using their vehicle in connection with voluntary or charity work.

Why would they offer this unless the IAM have asked them to?

Sorry, I'm missing your point here...I'm sure you're right...so?

[ScoobyChris]

I've had a scout through the responses in the thread and I'm just wondering what cover I would need to allow me to drive my car on the road under instruction (ie paid tuition) from an ADI as all the points seem to suggest this is not a covered scenario by any insurer?

My insurance specifically lists activities which are not covered, eg time trials, motor sports events, etc and I can't find anything in the small print which mentions that driver improvement or professional instruction is excluded. Is there a special buzzword I should be looking for, or is this something which the insurer will decide in the event of a claim?

Chris

[Porker]

I have never been clear on what the exact legal position is on this, but the following are thoughts:

i) It may well be that the insurance companies are similarly-minded to government legislators, and consider that instruction is only for those who have yet to pass their tests. They therefore do not make a specific exclusion for it - after all, you have a licence.

ii) Insurance is a contract of "utmost good faith", and the place the onus on you to divulge anything which might be material to their decision to insure you or the price of that insurance, to the extent that you are obliged to inform them if there's something that *might* influence their decision. This, to my mind, is the great catch-all that insurance companies use to cover their position.

I am sympathetic to insurers concerning the large amount of fraud which they suffer but it does irritate me that those who are trying to abide by the terms of their policies can be caught out in sometimes wholly unexpected ways.

P.

[rodericksdad]

I passed the letter from the IAM onto my insurance company and also spoke to them on the phone and explained what i was doing,they then went to their underwriters and then came back to me today,"no problem mr ----------,we have just added this to your policy,AND at no extra cost,the policy will be in the post tommorow,well done to NFU Mutual,

I find it a little bit of push for buisness that at the bottom of the letter from the IAM saying that their insurance company can sort this though for you,not on your nelly you lot lost my details last time and then were one of the most expensive as well,

[michael769]

I've had a scout through the responses in the thread and I'm just wondering what cover I would need to allow me to drive my car on the road under instruction (ie paid tuition) from an ADI as all the points seem to suggest this is not a covered scenario by any insurer?

I assume that you mean as a proper learner, in that case you would have (should have) informed the insurers that you hold a provisional licence. Insurers will assume that this will mean that you will be receiving instruction (either from an ADI or a friend/relative), and there is no need to point that out to them.

If you are a full licence holder then there is of course no such assumption and you would need to tell them as this is outwith SDP usage. Having said that a new driver going through Pass Plus would not be penalised if they did not inform their insurers.

[michael769]

I am sympathetic to insurers concerning the large amount of fraud which they suffer but it does irritate me that those who are trying to abide by the terms of their policies can be caught out in sometimes wholly unexpected ways.

P.

But if you abide by the T&C's you cannot get caught out as they are also binding on the insurers...

Seriously though, we are well aware that for things that are slightyl non-standard policy holders can get caught out. Suprisingly the industry has no wish to seek spurious excuses not to pay out.

In general when we find a problem with a claim we ask ourself four questions:

1. Has the policyholder deliberatly misled us. (eg we asked a specific question and they did not answer it truthfully.
2. Should a resonable person have realised that they should have told us.
3. Would we have significantly increased out preminum if we had known (or have refused cover)
4. Is there any hint of fraud here

If the answer to all of these is no then we will pay out anyway. If this was not the case then you would hear about a lot more problems with claims, as our last study revealed that 60% of drivers are failing to abide by the excact letter of their policy. ie 60% of drivers are technically uninsured .

In the case of the issues we have discussed here I would be stunned if an insurer did actually refuse a claim, and even if they did I doubt that the Insurance Ombudsman would support such a refusal. Having said that I would still advise letting your insurers know. Some day you may need their help and it is in your interest to maintain a good relationship with them.

I accept that there will still be people whom will have claims disallowed as they genuinly believed that what they were doing was OK. However the vast majority, even those who go to the papers knew well fine what they were doing was iffy. Their shock comes because they thought they would get away with it, or that they deluded themselves into thinking we would just let it pass.

[Porker]

Thank you for that comprehensive reply Michael.

I feel a bit better now, since I have always been completely truthful in dealing with the various insurers I use.

Sounds like a good idea to advise them of the demoing activities though, even though all the cars are fully insured for business use.

regards
Nick