Breakdown & Insurance

If there's one topic guaranteed to get a conversation going it's motorcycle insurance. Be it rally, show, on the boat to the TT or wherever we meet, compulsory insurance is never far from our lips. Small wonder that advertising revenue thrives on it!

Boring but necessary:

For all its emotion, it's a pretty dry subject. BUT A VITAL ONE. Despite the growth of niche motorcycle insurers, consultants and brokers, the subject remains shrouded in mystery and complexity. Bikers Advice's own Legal Director, Phil Shuker, seeks to weave his way through the insurance maze in PLAIN JARGON FREE LANGUAGE.

What is an insurance policy?

A legally binding agreement between YOU ("the Insured") and the insurance company ("the Insurer"). In return for your hard earned cash ("the Premium") YOU receive "cover" against certain DEFINED contingencies.

What type of insurance cover do i need?

The law states that when you use your bike you MUST be insured against CLAIMS OF OTHERS (ie third parties) FOR INJURY AND CERTAIN PROPERTY. This is known as THIRD PARTY INSURANCE. It is basic and compulsory. Although not legally compulsory fire and theft to your own bike is usually "thrown in". BUT NOT damage to YOUR bike. For this, you must either claim against a third party at fault or have comprehensive cover. Obviously comprehensive cover is more expensive – but you may agree to be responsible for say, the first £100. This is known as an "EXCESS" and helps keep down the level of your premium.

The reality:

Nowadays, when you buy motorcycle insurance you will typically buy not only the compulsory legal cover but a package of "add ons" – such as breakdown and recovery/legal costs/safety and security etc. As useful as these "add ons" may be, they do not allow for legal simplicity. Each "add on" may be provided by a different "Insurer" each with its own terms and conditions – not to mention the terms and conditions of your own broker or consultant who act as agent or intermediary for the people who actually supply the policies. In reality, each of these different types of cover (whilst packaged together) need to be considered separately.

The Main Policy Documents (Compulsory Insurance):

Cover Note
A temporary document typically issued when you first take out an insurance policy. It sets out the BASIC TERMS OF COVER. These may not be as comprehensive as when the policy document itself is issued.

Certificate of Insurance
The "permanent" document setting out a summary of the cover in your particular case and required (as with cover notes) when you seek, for example, to "tax" your motorcycle.

Policy Schedule
This is a document setting out in detail what YOU are/are not covered for.

Endorsements
These are not licence endorsements but modifications to the main insurance policy applicable to YOU.

Policy Terms & Conditions
These are the general terms and conditions of your policy which you need to be familiar with – but you also need to be aware of your own individual policy schedule and endorsement provisions.

What am I covered for?

Always(since it is compulsory by law)

	Injury/damage to others (ie third parties)
	Riding for social domestic and leisure use (this includes to and from work BUT NOT in connection with work)

Often

	Fire/theft relating to your own bike
	Legal representation in defending a claim/prosecution arising out of an accident
	Riding someone else's bike or vice versa – but usually only third party cover here – obviously permission must be given for the riding.

What am I not covered for?

Depending on your policy the following are not always covered:

	Accessories – eg top boxes
	Legal costs – solicitors and other costs in the event of accident
	Riding for business – eg courier
	Breakdown and recovery - but may be available as part of a "package" (often with separate insurers and separate terms and conditions etc – see above).

Your obligations to the insurers:

Things they need to know:

1. No insurer will insure you unless you are a "good risk". If you've had 10 convictions for drinking and driving, together with 20 for dangerous driving all over the last 10 years then you will probably find it well nigh impossible to get insurance – always assuming of course the courts are still allowing you to drive at all. You have a "duty of good faith" to insurers to tell them of anything that is likely to weigh in their minds. This duty is ongoing and continuing – not just before you get insured. The duty concerns for example driving convictions, fixed penalties, accidents etc.
   
   
2. Change of vehicle/method of storage/bike modification.
   
   All general requirements for reporting.
   
   Some you will need to report upon renewal – but others as and when the event occurs.
   
   
3. Cancellation
   
   
4. Condition of bike – as a very basic requirement, your bike should be road worthy. Often your insurance policy will require it to be maintained to an even higher standard such as "reasonable".

THE CONSEQUENCES OF NOT REPORTING RELEVANT MATTERS TO YOUR INSURANCE COMPANY/BEING IN BREACH OF YOUR POLICY CAN BE VERY SERIOUS. YOUR INSURERS CAN REFUSE, FOR EXAMPLE, TO INDEMNIFY YOU AGAINST CLAIMS BY OTHERS WHICH CAN RUN INTO MANY THOUSANDS OF POUNDS AND COULD BANKRUPT YOU.

Accidents:

These must be reported to your compulsory road traffic insurer within a set time rate – typically 7 days. REMEMBER that if you make a claim, CHOICE OF LEGAL REPRESENTATION IS YOURS. You do not have to go along with the panel solicitors chosen by your broker. They may be pressurising you to do so because THEY receive a large sum by way of referral fee (£600 is a typical one even in a small claim). The important thing is to receive specialist legal advice from a specialist biking solicitor – see the Legal Section of this website.

General pitfalls and misunderstandings:

For the purpose of this section the word "Insurer" means the person with whom you deal – ie insurance company director/broker/consultant/ intermediary.

Valuing your damaged bike and property:

Insured Value: This is the maximum value for which you are insured under the terms of your policy. IT IS NOT NECESSARILY the amount you will get following a claim.

Replacement Value: This is the cost to YOU for REPLACING the item. Again it is NOT what you will get following a claim – unless you are insured "new for old" – and have paid the appropriate premium!

Market Value: THIS IS WHAT YOU WILL GET FOLLOWING A CLAIM. It is the current value of the item in its undamaged state as immediately before the damage.

Customs & Classics: By their very nature customised motorcycles (and to a lesser extent classics) are "one offs". That means valuing them in the event of damage/write off can be extremely difficult. The valuer has got to consider various aspects including whether there is a market in that particular bike. If so what is the value? BE WARNED THAT YOU MAY NOT GET BACK THE VALUE OF ALL THOSE LOVING TOUCHES THAT YOU HAVE PUT TO THE BIKE – SPECIAL PAINT JOBS/ CHROME WORK/THOUSANDS OF HOURS OF "LTC" ON YOUR "PROJECT".

Geographical extent of cover:

This entirely depends on your policy. It should obviously include the UK. But very few actually include Europe and beyond.

Hire Bike:

In the event of an accident which was not your fault (or at least mainly not your fault) it may be possible to hire a bike for a reasonable period on extended credit.

Cancellation + changes to your policy:

These days basic bike insurance premiums amongst the specialist insurers are fairly competitive in general. If YOU cancel or notify any changes (eg change of bike/modification etc) be aware that your insurer may make an administrative charge – and frequently does.

Exceptions to your policy cover:

These are often numerous and various. BE AWARE OF THEM. Be aware of any particular "endorsements" applicable to your policy. General exceptions can include: