Insurance loophole causes concern 

Kwaka 10 insurance

A British rider now faces thousands of dollars in insurance claims after a man who bought his Kawasaki ZX10R had a fatal crash. And there is a lesson in this for all riders.

A loophole in the British insurance law means 48-year-old Paul Duffy may be liable for all costs involved with the accident that killed banned driver James Bryson simply because Duffy forgot to cancel his insurance when the purchase was made.

However, insurance experts in Australia say you probably don’t have to be afraid of what the seller does on your old bike. However, they stress that you should make sure you put the right day/time on the registration transfer form so you don’t get pinged for their traffic offences! You should also cancel the number plate off your eToll account so they don’[t rack up charges in your name.

That said, the experts haven’t checked every policy wording out there and it does pay to read the small print.

However, Suncorp Group spokesman Reuben Aitchison says AAMI and Insure My Ride policies are fine. 

The AAMI Motorcycle policy wording says: We will cover you or anyone you authorise to ride your motorcycle for legal liability arising from loss or damage to another person’s vehicle or property resulting from an insured incident caused by the use of your motorcycle in the period of insurance. 

Likewise, Insure My Ride policy wording says: If you hit something else: We’ll pay up to $20 million, for damage to someone else’s property. We’ll come to the party if damage is caused by your bike and, where you, or someone you let ride it, is found to be at fault.

The specific reference to “your motorcycle/bike” means if he has sold it to someone else, and has the paperwork, then it is no longer his bike, so he is not liable for what they do on it after it has been sold, says Reuben.

In the British case, Bryson was riding uninsured when he crashed into a Toyota Yaris in Scotland, just seven days after buying the bike. But because Duffy forgot to cancel his insurance policy, MCE insurance brokers say they are liable for the accident and can claim the costs back from him in court.

Duffy, who is recovering from leukaemia and looks after his disabled wife, said: ‘Lawyers said that because Mr Bryson had died and had no insurance, they would be paying out on my policy. Because he chose to buy my motorcycle, I am, in the eyes of the law, giving him permission to ride the bike and I am in breach of my contract. So if I have any assets, MCE can take them from me to recover costs. I am effectively having to pay for an uninsured driver having a fatal accident.”

It also appears that Bryson, 28, was serving a four-year driving ban and had only just been released from prison after attempting to evade three police vehicles in a friend’s car while nearly three times over the drink-drive limit.

The father-of-one was unable to be saved by paramedics after crashing the Kawasaki next to a stone wall.

It is a sad case and we wish Duffy well. In the meantime, take care when selling your motorcycle.

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