Can someone clarify then, if your car/motorbike is stolen and involved in an accident, does that mean your insurance policy is still valid you you are liable for any damage ?
So, insurance doesn't work like most people think (source: worked briefly in claims - it doesn't work like most people who called me think....).
Imagine the scene. You have fully comp and are stationary at lights with handbrake on. I drive into the back of you. Most people seem to think you can claim on my insurance - you can't. What you can do is repair your car and then seek to recover damages from me. So you ring up *your* insurers - get them to fix the car (and they may or may not "waive" the excess in this case) and they essentially buy the debt from you. They have the right to pursue *me* for the damages. And since I'm a law abiding citizen I will have 3rd party cover so they will get all their money back including the excess (which is the only reason they waived it).
Now of course, because they are going to win, your insurers "spend" as much money as they need to on your car. Since you're an innocent party you have the right to be put into the situation you would have been if the accident had never occurred. This includes hiring a replacement car for you (and they will be happy to do this because the agreement they have with most other insurers says they can charge the hire at a flat rate even if they negotiate better rate with the hire company - that's just good business right?). So it's in *my* insurer's interests to call you first and offer to fix your car, hire you a new one and maybe throw in a bottle of sparkling wine for your trouble. Because frankly your insurers are going to charge way more than some cheap fizz for
their trouble. Also, don't be surprised if a bunch of people contact you and offer to "manage" the repair for you - they also get the chance to make money.
But....what if I'm not insured? Check your policy - practically all insurers have "uninsured driver" cover which is actually backed by an industry body. Your insurers repair your vehicle and then claim at least a big chunk of the cost from the Motor Insurance Bureau fund instead of my insurers. Now any thief would automatically be uninsured because every policy I've ever seen says other driver cover is *only* extended if they have the insured's permission to drive (or it's a bona fide emergency). But if you sell your bike....? Well, they are driving with your permission. And you're insuring the bike so yeah, if they aren't more specifically insured it might cascade back to your policy.
TL;DR: don't insure stuff you no longer own. But don't worry too much about thieves. It's unlikely they will be covered on your policy.
Bonus fun fact: in the case above (where you did nothing wrong and it was all my fault and my insurers pay everything and your insurers actually make money).......your insurers will almost certainly still put your premium up. Welcome to capitalism.
