Van Insurance

[Mr-H]

My son works as a van driver for a small company. The owner has just announced that he wants to insure the van my son drives in his name (not the company's name). He says he intends doing this for the 3 or 4 vehicles he owns, and that this will save money on the vehicle insurance bill. He insists that the company will continue to pay etc. but this does not sound right to me. It means that my son would have an insurance policy in his name, for a vehicle he does not own! Does it sound scammy?

[Buenchico]

I can't see that your son has an 'insurable interest'. (Read through this lot if you want to attempt an understanding of what that actually means in law! http://www.hmrc.gov.uk/manuals/gimanual/gim1050.htm ).

Therefore any declaration by him that he has such an interest (which, I assume, would be required for an insurance contract to come into effect) would render the insurance null and void and render him, together with his employer, liable to prosecution for 'fraud by false representation', contrary to Section 2 of the Fraud Act 2006. (Maximm penalty = 10 years imprisonment).

However I admit that I'm fumbling in the dark here (so I'd welcome the views of people like New Judge or Barmaid) but I certainly wouldn't put my name to any such contract of insurance!!!

[BlackadderV]

When you say "in his name", do you mean your son's name or the owner's name?

[Dizmo]

If his boss is willing to pay the insurance outright for the year as business insurance then I'd take his arm off. My brother used to be a delivery driver and had to pay his own business insurance because the owner wasn't willing to pay for it. Get him to ring his insurance company and ask them if it would be legitimate. As long as the vehicle is in his name, there is no problem with someone else paying the bill outright.

[BlackadderV]

...and it's "спокойной ночи" from me.

P.S. not spam☺

[BlackadderV]

...oop, wrong thread.

[Mr-H]

Sorry Blackadder, I believe the vehicle would be DVLA registered in the company's name so that he would not be the registered 'owner', the insurance policy would be in my son's name but paid for (probably on a monthly basis(?)) by the owner of the company. Methyl - I assume that the MVA you talk about meant that the money was paid to the insurance company etc. directly from your bank account - not quite the same thing?

[soapnumpty]

I work in insurance and like Beunchino says, you have to have insurable interest in something to be able to insure it, which in simple terms means you would have to suffer financially if the item was lost/damaged etc. As your son does not own the vehicle, he wouldn't suffer financially if it was lost/damaged (his employer would) so he can't insure it. The owner needs to insure all the company vehicles on a fleet policy and then all employees will be insured to drive the vehicles. This is also going to be cheaper than insuring the vehicles separately.

[New Judge]

Yes I quite agree with soapnumpty.

It would be a bit like me insuring David Beckham's Ferrari (or whatever). It gets nicked and I get £200k.

Apart from that there could be serious problems if it is discovered that misrepresentation had taken place in order to reduce the premium. The "Registered Keeper" with the DVLA has nothing to do with ownership and if it is discovered that your son does not own the vehicle but has insured it as if he does the insurers may well revoke cover retrospectively. This means not only will there be problems in the event of a claim but your son could find himself on the wrong end of a charge of driving without insurance.

Your son should avoid this scheme like the plague.

[Mr-H]

Thanks a lot folks, especially New Judge. I have told my son to have nothing to do with it. His boss is now suggesting that if one of his drivers has an accident he would expect that individual to perhaps pay the insurance excess (maybe £500?). I don't think I would necessarily have a problem with this, but I wonder - is this perhaps normal business? Could we insure my son AGAINST having to pay the excess?

[SirOracle]

Yes your son can insure himself against the excess. He should go to a competent insurance broker to arrange this.

Legally your son has an "insurable interest"up to the limit of the excess.

[Buenchico]

The employer can't deduct the insurance excess from your son's pay (or otherwise get the money from him) unless such a provision was included in your son's contract of employment when he joined the firm (which it clearly wasn't) or he now agrees, in writing, to such a deduction being made in the event of an accident. (i.e. BEFORE the accident occurs).

He can't be compelled to agree to such a change in his contract. Any attempt by the employer to do so, which resulted in your son quitting his job, would leave him open to having to pay compensation for constructive dismissal.

Deductions:
https://www.gov.uk/understanding-your-pay/deductions-from-your-pay

Contractual changes:
https://www.gov.uk/your-employment-contract-how-it-can-be-changed/getting-agreement

Constructive dismissal:
https://www.gov.uk/dismissal/unfair-and-constructive-dismissal

[Mr-H]

Thanks guys, plenty of food for thought here. Time will tell if we need to follow any of the advice given. Let's hope we don't.