GMB PERSPECTIVE
There is a specific letter that was sent to a PHV proprietor from an insurance company that is in circulation within the trade relating to a claim that was rejected because the PHV had been shown to have been predom- inantly working out of area.
I spoke to a very helpful chap at the respec- tive insurance company who gave me further details on the case. I must stress that data protection was not compromised.
Details:
When applying for insurance the PHV pro- prietor was asked specific questions relating to the vehicle licence such as if there was any intention to work outside of the respective licensing authority. These were not the specific questions, but the inference is very clear to me. This is carried out under the ‘Principle of Upmost Good Faith’. In principle: the premium charged is based on where the vehicle is licensed on the presumption that is where the vehicle will predominantly work, along with the address of where the proprietor lives.
If that vehicle then predominantly works in another area, and the proprietor has not declared this and there is a claim, then the insurance company has the right to repudi- ate the claim and cancel the policy - as happened in this case. This came to light when the insurance company requested details of the previous month’s work carried out by that PHV from the operator.
The insurance chap did state that cover would be given to a PHV licensed in one area and predominantly working in another area and the premium would be adjusted accordingly.
I did ask if the difference in premium rates charged was the main factor for repudiating a claim but was told that it is enough for the proprietor to supply dishonest information to reject a claim and cancel the policy.
The main issue as we know is that there has been a mass of Uber drivers flocking to areas where licensing is cheap and easy with lower requirements and probably lower insurance premiums and then working in areas with more stringent conditions of licensing that would also have higher insur- ance premium rates. But to stress the point: regardless of the difference in premium charges - providing dishonest information on material facts is enough for a claim to be repudiated and the policy cancelled.
The knock on effect is there is then a black mark against the proprietor, which is more than likely recorded on the SIRA database, an industry recognised platform where
MAY 2020
fraud etc is registered for those insurance companies and agents to report and search.
Taking this a bit further though is the fact that when a PHV licence is applied for then (it is presumed) that the licensing authority is given a copy of the insurance certificate... which for all intentions and purposes simply states that the vehicle is covered by insur- ance even if that proprietor has no intention of working within the licensing area of the issuing authority.
I wonder how many of the thousands of Wolverhampton PHV’s that predominantly work out of area are properly insured. I won- der if the apparently ever so efficient Wolverhampton system allows for the checking of the small print of the insurance cover to see if all those PHV’s have declared to their respective insurance companies that Wolverhampton is never revisited once the licence is issued.
I doubt it. I spoke with one of our own taxi licensing officers who did a quick check on a copy of a supplied insurance certificate and of course no specific details relating to which area a PHV is covered is stated. It just simply provides proof that the vehicle has insurance.
Maybe all insurance companies covering licensed vehicles need to urgently adapt to provide this information on certificates as standard, in the same way that they state who is covered to drive the vehicle.
Well I can tell you that the insurance compa- ny that issued that letter no longer does any new business in Wolverhampton. Now con- sidering how many thousands of policies could be bought and the revenue gained, I think we can all agree that there is some- thing amiss with the explosion of Uber drivers being told that they have the ‘Right to Roam’ but not being told to be truthful with their insurance.
Interestingly the particular insurance com- pany in this case is now looking deeper into claims, for example if the incident of a claim took place in an area in which the vehicle was not licensed, then this would automati-
cally trigger an investigation requiring details of the previous month’s work. This evidence will either assist with the claim or lead to the repudiation of it. If it is shown that the majority of the work undertaken was not as stated on applying for the insur- ance, then the proprietor is in big trouble.
So coming back round again to an ‘Intended Use Policy’ to be equally applied to PHV’s and operators in the same way as a hackney carriage - I see this going hand in hand with the current murky issue of insurance with the revelation of the quoted case. Because without it there will be thousands of Uber PHV’s working, cross-bordering, predomi- nantly out of area with the great possibility of having insurance policies repudiated and subsequently cancelled upon a claim. And it is only when a claim is made that it is dis- covered that there is a major issue.
Until all insurance companies make it bla- tantly obvious on the insurance certificate where the vehicle is insured to carry out work, we can absolutely bet that the huge majority of PHV’s are driving around with- out the correct insurance cover as I very much doubt that any public hire insurance will cover the whole of the UK.... unless you know better?
Even the infamous ‘Triple Lock’ can stay and that QC can go to the highest mountain and still shout “Right to Roam!” - both of which have played a major factor in the ero- sion of local licensing control - because these would work alongside an ‘IUP’. You can be as ‘Triple Locked’ as you like and continue ‘Roaming’ but you can no longer go and get licensed in one area and pre- dominantly work in another nor can your operator encourage you to do so. Problem solved!
Insurance companies need to look at mak- ing it very clear on the insurance certificates in which area/areas the vehicle is covered to work. This will help the local councils to check cover.
Additionally the insurance industry needs to seriously consider the backing of the ‘Intended Use Policy’ to be applied to PHV’s and operators because this goes naturally hand-in-hand with their line of business.
Have I upset you? If yes, then I make no apologies.. if no, then I am mellowing in my old age and I must try harder.....
Andy Peters Secretary GMB Brighton & Hove Taxi Section
andy.peters@
gmbtaxis.org.uk
91
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