Home / Insight / Motor Insurance Update: New Untraced Drivers Agreement 2017 and changes to the Uninsured Drivers Agreement 2015

Motor Insurance Update: New Untraced Drivers Agreement 2017 and changes to the Uninsured Drivers Agreement 2015

01/03/2017

The new Untraced Drivers Agreement and Supplementary Uninsured Drivers Agreement came into force this week. The earlier agreements continue to apply to incidents which occurred before 1 March 2017.

We take a look at the significance of the key changes for motor insurers.

The Supplementary Uninsured Drivers Agreement 2017

The Supplementary Agreement makes two changes to the Uninsured Drivers Agreement 2015 by: (1) removing the exclusion relating to claimants’ uninsured vehicles; and (2) removing the terrorism exclusion.

  1. Uninsured claimants. Under the 1999 and 2015 Agreements, the Motor Insurers Bureau (MIB) (and so any Article 79 insurer acting as agent for the MIB) was not liable to settle any claims against an uninsured driver where the claimant’s vehicle was also uninsured. That exclusion (Clause 7 of the Uninsured Drivers Agreement 2015) is now deleted. This means that insurers handling a claim on behalf of the MIB against an uninsured motorist will no longer be able to refuse to meet a claimant’s vehicle damage claim where that vehicle is also uninsured.
  2. Terrorism. The earlier agreements excluded the MIB’s liability (and so any Article 79 insurer’s liability acting as agent for the MIB) for loss and damage caused by or in the course of terrorism. That exclusion (Clause 9 Uninsured Drivers Agreement 2015) is now deleted, meaning that insurers handling claims on behalf of the MIB will be liable to meet claims against motorists who cause death, injury or property damage in the course of terrorist activity. Given recent terrorist events involving vehicles across Europe, this has the potential to be significant for motor insurers.

The supplementary agreement is available to view at:
https://www.mib.org.uk/media/350345/2017-supplementary-uninsured-drivers-agreement-england-scotland-and-wales.pdf

The Untraced Drivers’ Agreement 2017

The changes:

  • The role of the MIB in handling ‘hit and run’ claims means that these changes are unlikely to have a significant direct impact for motor insurers. However, it is worth noting the changes given the potential for claims to be passed to motor insurers if the offending vehicle is later identified.
  • The changes regarding terrorism and uninsured claimant vehicles will now apply to untraced driver claims.    
  • Claims must be made to the MIB using a specified form whereas before the claim only needed to be made in writing.
  • Claimants are no longer required to report the incident to the police and are now only required to do so if the MIB reasonably requests them to do so.
  • The position in cases of property damage remains largely unchanged. The MIB will still only be required to meet claims for property damage arising out of the use of unidentified vehicles where the claimant has also sustained ‘significant personal injury’ in the same incident. However, the definition of ‘significant personal injury’ has been relaxed making it easier for the victims of ‘hit and run’ claims to recover sums for property damage. ‘Significant personal injury’ is defined as death, 2 nights hospital inpatient treatment or 3 sessions of hospital outpatient treatment. The MIB will not be liable for property damage claims which do not exceed £400 (increased from £300).
  • The agreement excludes the MIB’s liability where the claim is brought by a passenger travelling in a vehicle where that passenger knew or had reason to believe that the vehicle had been stolen or was uninsured. The new agreement clarifies that it is the knowledge of the deceased which will determine the issue and it will be for the MIB to prove.
  • The rules about costs which apply to civil claims do not apply to claims against the MIB. However, the new agreement introduces a new costs structure (see Clause 21 of the new agreement).

The new agreement is available to view at:
https://www.mib.org.uk/media/353664/2017-untraced-drivers-agreement-england-scotland-and-wales.pdf

One to watch...

There is an interesting case on the horizon which was heard by the Court of Appeal in December 2016.

We understand that the case of Cameron v Hussain & Ors is a claim brought by the victim of a road traffic incident through motor insurers where the vehicle was identified but the driver was not.

Such claims are usually brought under the MIB agreements because formal court litigation is not possible as the alleged offending motorist is not identifiable and so there is no legal person to sue.

This case could be significant for insurers if claimants are provided with a route to litigate against insurers directly in such circumstances, not least from a costs perspective.

We will provide further updates once the judgment is available.   

For more information please contact:

Scott Harwood
Associate
T: 01204 677338
E: sharwood@keoghs.co.uk

 

 

Author

Scott Harwood

Stay informed with Keoghs

Sign-up

Our Expertise

Vr

Claims Technology Solutions

Disrupting claims management with innovation & technology

 

The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.