How being hit by an uninsured driver affects your car insurance

Find out what happens to your premiums, excess and no claims bonus if you’re hit by an uninsured driver and whether you’ll have to bear the costs.

Key points

  • If you’re hit by an uninsured driver, some insurers will protect your no claims discount, waive your excess, or both
  • You’ll need to meet certain conditions, such as noting down vehicle details and proving the accident wasn’t your fault
  • If you only have third party cover, the Motor Insurers’ Bureau may be able to compensate you for damage to your vehicle and injuries
  • If you’re at fault it’s possible that your insurance may have to pay to repair an uninsured driver’s vehicle

Uninsured drivers are a huge burden to law-abiding motorists and the insurance industry.

Uninsured and untraced drivers kill an estimated 130 people and injure 26,500 each year and these uninsured drivers add up to £30 to the cost of each car insurance policy.[1]

Around half a million motorists were handed penalty points for driving uninsured between 2010 and 2013 and the average fine for this offence was £312 in 2012.[2]

But that’ll be cold comfort if you’re actually hit by an uninsured driver, because it could mean paying an insurance excess, losing your no claims bonus and - if you don’t have a comprehensive insurance policy - having to pay for repairs to your car yourself.

Some insurers offer extra protection from uninsured drivers by waiving excesses and protecting your no claims bonus if you’re hit by one.

However, this is by no means universally applied, so you’ll have to check your policy documents to find out if you have this cover.

CarProtected no claims bonus and waived excess

Normally if you’re in an accident and it’s the other driver’s fault, their insurance will pay for your medical costs and vehicle repairs - that’s why everyone has to have at least third party insurance by law.

However, if the driver who hit you is illegally driving without insurance, you’ll probably have to claim on your own policy if you have comprehensive insurance.

Some providers recognise that this is a frustrating and unfair situation for their customers and will waive your claim excess so that you won’t lose any money for making a claim.

Others will protect your no claims bonus, so you won’t lose any no claims discount for making a claim for being hit by an uninsured driver - but note that your premium may still rise at renewal as a result of the accident.

Penalties for uninsured drivers

  • Fixed penalty of £300 and six penalty points
  • An unlimited fine if the case goes to court
  • Disqualification from driving
  • Police also have the power to seize and destroy a vehicle that’s being driven uninsured

On 11 June, 2015, Gocompare.com checked 223 comprehensive car insurance policies listed on the matrix of independent financial researcher Defaqto and found that benefits regarding waived excesses and protected no claims discount were by no means universal, with just 54% offering one or both of them.

Of the policies checked, 48% would protect your no claims discount and excess if you were hit by an uninsured driver, while 6% would protect your no claims discount but would still deduct the policy excess from any claim made.

A single policy out of the 225 checked would waive the policy excess if you were hit by an uninsured driver but would still take away your no claims bonus.

Conditions and clauses in an uninsured driver claim

Even if your policy is one that will waive the excess and no claims reduction if you’re hit by an uninsured driver, most ask that you satisfy a number of conditions to be eligible. These might typically include:

  • The insurer establishing that the accident wasn’t your fault
  • You providing details of the other vehicle such as make, model and registration number
  • You submitting information concerning any witnesses and any name and address details you have for the other driver

Insurers will often deduct some or all of your no claims bonus and will ask that you pay the excess while the claim is being settled.

If the claim is settled in your favour, the insurer should restore your no claims discount and refund your excess.

classic_car_genericThird-party insurance and the Motor Insurers’ Bureau

If your insurance policy is third party only or third party fire and theft, you’ll have no prospect of claiming on your own insurance.

However, you may be able to submit a claim to the Motor Insurers’ Bureau (MIB) instead.

The MIB was set up to compensate victims of uninsured and untraced motorists and it’s funded by insurance companies, which is why there’s a direct link to uninsured drivers pushing up the cost of your premiums.

The MIB investigation process can be very slow, with resolutions taking anywhere from three months to over a year for more complex cases.

Because of this, although anyone can choose to claim from the MIB for damage and injury caused by uninsured drivers, the MIB recommends you claim from your own insurer if you have a comprehensive policy.

The MIB won’t pay out purely because the other driver was uninsured or untraceable - if it finds that the incident was your fault, your claim will be rejected.

What if the accident’s your fault?

Even if the other party’s uninsured, if the accident was entirely your fault - for instance you hit another driver from behind - then you will be responsible for repair costs to your vehicle and theirs.

Your third party insurance should cover the cost of repairs to the other person’s vehicle.

Of course, the uninsured driver can still be prosecuted and police have the power to seize and crush their vehicle - and if this happens there’ll be no car to repair.

If you have comprehensive insurance, this should cover you for the repair costs to your vehicle as well.

But if you only have third party cover, you’ll have to pay the repair costs for your own vehicle yourself.

By Derri Dunn