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The Motor Insurers Bureau

What is it?

The Motor Insurers’ Bureau is a private company, limited by guarantee, which was set up in 1946. Its principle role is to fund compensation claims against uninsured or untraceable drivers. They work closely with the Government to look at ways of reducing the amount of uninsured drivers on the road and ways of compensating motorists. Every provider of motor insurance in the UK must be a member and contribute to the funding of the Bureau by paying a levy. The central office is in Milton Keynes where some 320 staff members working day and night.

Why is it needed?

In an ideal world the Motor Insurers’ Bureau should not be needed. The normal way an accident would play out is that driver A might get distracted by a squirrel eating an acorn at the side of the road and run into the back of driver B causing £4,000 worth of damage. Driver B would then sue driver A for £4,000 and driver A’s insurance would pay out. However, if driver A had chosen to drive on the road without taking out a policy of insurance, he would be committing a criminal offence, but would leave driver B without a source of compensation. Where the total loss is £4,000 this would be extremely irritating but where the crash caused severe injuries to driver B confining him to a wheelchair, the lack of compensation could be utterly devastating. In these situations the Motor Insurers’ Bureau would provide the compensation to driver B. As they would if driver A was insured but drove off after the accident and could never be found again.

The schemes

There are three schemes which the Motor Insurers’ Bureau operate to protect various categories of injured party.

  • The uninsured drivers’ scheme – this scheme is applicable where driver A is uninsured and causes or contributes to the accident. It must be proved that no policy of insurance exists before the Bureau will turn their minds to providing compensation. The same elements need to be proven as if driver B were suing driver A themselves.  In deciding how much to pay out the Bureau will consider the cost of repairing the vehicle, the cost of a hire car, the cost of any damaged property, and the monetary value of any personal injury suffered. Driver B would also have his legal costs paid by the Bureau upon a successful claim.
  • The untraced driving agreement – this would be the appropriate scheme where driver A was insured but fled the scene and could not be traced afterwards. The Bureau would assess the claim and in deciding the quantum to award they would take into account damage to property as well as any injuries sustained. Only a contribution toward legal fees can be recovered, in the sum of £500 + VAT.
  • The green card scheme – this is the appropriate scheme to deal with foreign nationals who cause an accident due to their negligent driving. Here the foreign driver may well be insured to drive in this country under their domestic insurance policy. In this situation the injured party could seek compensation from the foreign driver themselves but this process could be very difficult and expensive, having to communicate with an insurance company in a different country which may not speak English. In these circumstances the Motor Insurers’ Bureau may step in and provide the compensation themselves to save the injured party the time and money. Unsurprisingly this scheme has developed as a result of modern European Union ideology and EC law.

The ultimate cost

The more uninsured drivers there are on the roads, the more pay-outs the Motor Insurers’ Bureau has to make. This then increases the levy that all insurance providers must pay to the Bureau and hence the more motorists must pay for their individual policies. It has been estimated that the cost of uninsured drivers on law abiding motorists is £30 per year.

It is clearly in the public policy for the Bureau to operate, one would hope that the police keep up their plight to locate and prosecute uninsured drivers so we can all have cheaper car insurance.

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