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I sold my motorbike – do I need to cancel my insurance?

Cartoon of van crashing into a motorbike
5th December 2014

When selling your motorbike, it’s important to contact your insurer to let them know that you won’t be using it anymore. It’s not uncommon for motorcyclists – or former motorcyclists – to receive a call several months after selling their bike to say that they owe money to their insurer.

This could happen to you if the new owner of your old bike has been involved in an accident. If they haven’t got their own insurance, or their insurance is deemed ‘void’ for one reason or another, you may be held responsible if you still have a policy connected to the vehicle.

This is unlikely to be a problem if you transferred your policy over to another model after selling your old bike. But if you didn’t buy a replacement, or failed to contact your insurer, this is where the problem lies.

The law

While the idea of having to pay for an accident that had nothing to do with you may seem bad enough, many people who find themselves in this situation discover that the cost of the claim isn’t their biggest worry. By selling the bike to someone who doesn’t have insurance, the named person may be held liable for permitting an uninsured driver to use the vehicle, whether they knew about their lack of insurance or not.

While this may seem unfair, the law is very clear on the matter. The law tends to side with insurers in such a case, as it is a statutory requirement for insurers to meet third party claims, even if the motorcycle was stolen.

By handing over the keys for your motorbike with your policy alongside it, you’re breaking the contract that you have with your own insurer while allowing the new owner to be more reckless and save money on their own policy. You wouldn’t let a stranger drive your car under your insurance, so if you’re permitting someone else to ride your motorbike, you should remove your connections with it first.

Make the effort to cancel your insurance

Cancelling your insurance may seem like a lot of hassle, but you’ll thank yourself for setting some time aside to contact your insurer should the new owner find themselves in trouble. In fact, by cancelling your insurance, you won’t hear from them at all as you won’t have any connections to the bike any longer. A few minutes during the initial sale can save you a lot of time and more importantly, money, in the long run.

If cancelling was effortless, people wouldn’t think twice about it. But the reason that many motorists fail to cancel their insurance after selling their vehicle is because unfortunately, cancelling isn’t free.

Many people choose to keep their insurance to avoid paying a cancellation fee, and to get their no claims bonus. But if you decide to do this, you could be held responsible for any accidents that occur on your insurance contract. Relying on this no claims bonus can actually cause more harm than good.

With the law very much on the side of the insurers on cases such as this, it can be frustrating for motorists to be held responsible for the actions of other drivers. Particularly when there are substantial costs involved in cancelling insurance policies early. But if you are selling your motorbike and want to avoid finding yourself in hot water a few months down the line, it may be worth getting in touch with your insurer to be on the safe side.

About Your Legal Friend

Your Legal Friend is a personal injury claims solicitor that deals with motorcycle accident compensation claims. For more information, please don’t hesitate to get in touch with the team.