Can we split third-party from comprehensive policiies?
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Eugene Gold Thursday 27 January 2011 |
Over the next couple of weeks, I intend to look at the options for making third-party insurance part of the road-tax licence fee. I want to explore whether this would make third-party insurance easier to collect and whether it would reduce the number of un-insured drivers on our roads.
This method of collection is used in other European countries and, superficially, appears to be a very simple answer to a complex problem.
Motor insurance has always been made up of two parts, the required third-party cover and the optional cover for your own losses.
The third-party component, sometimes referred to as the Road Traffic Act element, indemnifies you for damages that you cause to other people. So, if you injure someone or even just damage their car, there is money to cover your liabilities. The liability remains with you, you are responsible for the other party’s losses, but you have an insurance company standing behind you.
This third-party component is mandatory and ensures that you, with the aid of your insurers, are able to meet your liabilities.
The optional cover, which is included in so-called comprehensive policies, covers you own losses. If your car is damaged, or if you are injured and there is not a third party against whom you can claim for your damages, your insurers will meet your costs in accordance with the contract that you have with them.
There is also a third element that has crept into the insurance vocabulary. This is the Motor Insurers' Bureau fund available to compensate those third parties injured by uninsured drivers. The money comes from a £30 surcharge levied on all insured drivers and seeks to ensure that no-one with a valid claim against another driver should go uncompensated. The idea is sound and was manageable when the number of uninsured drivers was small. Last year, however, the claims against uninsured drivers topped £500million.
Our government says it is clamping down on uninsured drivers. Insurance companies are already working with the DVLA to combine their databases to indentify the million plus uninsured cars that share our roads. Considering the seriousness of the situation, the planned actions are still pretty tame. There will be a warning letter and a possible fine of £100 with repeat offenders facing vehicle seizure.
At present, uninsured drivers can only be prosecuted if caught behind the wheel. The new offence of keeping an uninsured vehicle planned for the 2006 Road Safety Act was never enacted.
Considering that 160 people are killed and 23,000 injured each year by uninsured drivers, this is a very weak response.
The series of weekly articles by Eugene Gold on changes to mandatory insurance will begin on 7th February.
| Comments | Post a comment |
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Janet Kemp 28 January 2011, 04:08PM | |
Anything to reduce the number of uninsured drivers on our roads would be a good idea. | |
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Ken Pang 28 January 2011, 05:11PM | |
I work for an insurance company and can tell you that uninsured motorists are five times more likely to be involved in a road accidents than normal insured drivers. Thee guys are also more likely to be involved in drugs, crime and other offences. | |
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Brenda Watkins 29 January 2011, 04:10PM | |
My husband is a policeman and he says that Vauxhall Astras and BMW 3 Series cars are the usual give away. If he and his colleague stop one of those, there is a strong chance that it is uninsured. | |
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Jeremy Staff 29 January 2011, 06:12PM | |
I am a police patrol officer and agree with Mary’s comment but I would add the Vauxhall Vectra and Corsa to the list. | |
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Kyle Andrews 30 January 2011, 11:13AM | |
If you do get caught, they can seize your car but do not usually do that. What can happen is six licence penalty points, which is a real bugger, and a maximum fine of £5,000. | |
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Sam Krebb 30 January 2011, 03:15PM | |
The police seized my car just because I was late with the insurance, which meant that I could not get it taxed. | |
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Laurie, Potters Bar 1 February 2011, 05:47PM | |
This Government is robbing us blind at every turn they can and for that I will not place my ballot in either the Conservatives or the Liberals who are not following their Manifesto one bit. | |
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Pete, Doncaster 3 February 2011, 09:52AM | |
It would make very good sense to include insurance and tax but then we have to enforce the tax payment. The papers indicate that there are over a million untaxed cars on the road. I understand that some of these may be on false plates but surely with all our traffic wardens and cameras we can identify a decent percentage of these. | |
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Dani Anderson, Sailsbury 8 February 2011, 11:35PM | |
I think this is a fantastic idea, my brother was hit by an uninsured driver and the rigmarole and stress he went through was unreal, it seems nowadays we have to insure ourselves against the uninsured which is completely backward. It is about time these people were made to | |
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Simon, Eltham 14 February 2011, 02:34PM | |
This has to be the way forward; it will stop criminals from slipping through loopholes and therefore stop idiot uninsured drivers from causing so many fatalities on the roads. | |
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Paul, Littlehampton 7 July 2011, 10:51AM | |
Any measure to ensure an accident victim is covered by adequate insurance is vital. It may also be that the uninsured driver becomes a victim so adequate cover also vital, otherwise the tax payer gets the bill for their care. | |
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Simon, Peckham 14 July 2011, 01:23PM | |
I also work for an insurance company and as Ken commented above uninsured drivers are the ones that are more likely to cause accidents. The reason they have no insurance is because they are usually people that have criminal records therefore are used to breaking the law. | |
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