The Motor Insurers' Bureau - MIB

The uninsured drivers agreement
The untraced drivers agreement

Compulsory Third Party motor insurance was introduced in 1930. Despite the severe penalties for non- compliance with the Road Traffic Act a few motorists neglected to obtain even the minimum level of car insurance required. These individuals were usually the same people who had no means available to meet any third party injury claim that might be made against them.

In 1946, after discussion between motor insurers and the Government, the Motor Insurers' Bureau (MIB) was formed. The MIB aims to ensure that road victims, by reason of absence of car insurance, are not left suffering.

The Road Traffic Act requires all insurers selling motor vehicle insurance in Great Britain to be members of the MIB. The MIB receives its funds from contributions from all car insurance companies on the basis of the number of cars insured by the company. The MIB fund is regarded as the fund of last resort.

The Motor Insurers' Bureau (MIB) operates under two agreements with the Secretary of State for the Environment namely:

• The Uninsured Drivers Agreement, and
• The Untraced Drivers Agreement.

The uninsured drivers agreement

The "uninsured driver" will either have no car insurance at all, or by virtue of the policy have no valid car insurance.

• No Car Insurance
  If the uninsured driver was for example, a tourist driving a friend's car without having any car insurance, the MIB will be involved in the settlement of the Third Party injury and / or property claim
• No Valid Car Insurance
  If the uninsured driver has no valid car insurance for example, there is only private use on the policy but whilst using the car for business the driver causes a Third Party to suffer a loss, the insurer will repudiate the claim. The MIB will however insist that the insurer will pay the Third Party. The insurer must then attempt to recover its costs from its own customer.

The untraced drivers agreement

An "untraced driver" is for example, a joy rider or someone who has failed to stop at the scene of an accident and is never found. The MIB will consider claims for losses caused by untraced drivers provided that those losses are otherwise uninsured, and the incident resulted in personal injury or death. This is because it would be too easy to submit a fraudulent claim for property only.