In the UK motor insurance system, the term “Article 75 insurer” refers to a specific status that an insurer may have when handling third party claims arising from road traffic accidents. But what exactly does being an Article 75 insurer entail and how does it differ from other types of motor insurer liability? This article will explain the meaning of Article 75 and its implications.
Overview of Motor Insurer Liability
Under the Road Traffic Act 1988, drivers in the UK are required to have insurance that covers them for third party claims. This means claims brought by someone else for death, injury or property damage resulting from use of their vehicle.
When an accident occurs, different insurers may become involved depending on their relationship to the driver and vehicle:
Contractual insurer – the insurer of the at-fault driver under a motor policy
RTA insurer – an insurer who did not issue a policy to the driver but has duties under the Road Traffic Act
Article 75 insurer – an insurer whose connection arises through the Motor Insurers’ Bureau agreement
MIB – the Motor Insurers’ Bureau, which acts as a safety net for uninsured losses
This hierarchy determines which insurer will have to pay a claim when multiple options exist. The Article 75 insurer sits below the contractual and RTA insurers in the pecking order.
What is Article 75?
Article 75 refers to Article 75 of the Articles of Association of the Motor Insurers’ Bureau (MIB). The MIB is an organization that all motor insurers conducting business in the UK must be members of.
Its purpose is to satisfy court judgments for third party losses caused by uninsured and untraced drivers, as required under agreements between the MIB and the government.
Article 75 sets out the circumstances under which a member insurer will be deemed an “Article 75 Insurer” for a particular accident claim. This makes the insurer potentially responsible for meeting the third party’s losses in certain situations.
When Does Article 75 Insurer Liability Arise?
According to Article 75(2)(a) of the MIB agreement, an insurer will be an Article 75 Insurer if at the time of the accident it was providing insurance, other than under a driving other vehicle clause, in respect of the vehicle that caused the loss.
So even if the at-fault driver was not covered under the actual motor policy in place, if the insurer issued a policy on that vehicle, it can be deemed an Article 75 Insurer for third party claims.
Some examples where Article 75 status could apply:
The driver was excluded from coverage under the policy terms
The driver did not have a valid driver’s license
The vehicle was being used outside the permitted purposes in the policy
The policy was voided later for non-disclosure of information
Someone else was falsely named as the insured on the policy
In these situations, the insurer may have grounds to avoid liability to the policyholder. But under Article 75, it can still be on the hook for third party injury and damage claims.
Limits of Article 75 Insurer Liability
While an Article 75 Insurer may have to pay an accident claim, its obligations are subject to certain limits:
Only applies if no higher ranking insurer (contractual or RTA) is involved
Covers third party losses only, not first party claims by the policyholder
Bound by exclusions and conditions in the MIB Uninsured Drivers Agreement
Limited to accidents occurring on public roads (not private land)
Subject to a right of recovery against the insured driver
So Article 75 does not create unlimited or automatic liability. But it helps ensure innocent victims receive compensation where a policy defect exists.
Article 75 vs. RTA Insurer Status
It’s important to understand the difference between Article 75 and RTA (Road Traffic Act) insurer status:
Article 75 – connected to the vehicle under a policy
RTA – potential duties under section 151 of the Road Traffic Act, even without a policy
For example, if a driver is covered under their own policy, their insurer is a contractual insurer. If they drive someone else’s car not listed on their policy, their insurer may become an RTA insurer for that accident.
And if there is a policy on the other car, that insurer could be an Article 75 insurer, despite not covering the at-fault driver directly.
So one looks to the vehicle (Article 75) and the other to the driver’s insurance obligations (RTA). An insurer can potentially have either status depending on the circumstances.
How Article 75 Status is Determined
When there is uncertainty around whether an insurer qualifies as an Article 75 Insurer, the issue gets decided by the MIB’s Technical Committee. This committee consists of representatives from member insurance companies.
They review evidence and submissions to determine if Article 75 status exists based on the particular policy and accident details. Their decision can be appealed through arbitration if disputed.
Establishing Article 75 status is important because it determines which insurer is liable for handling and paying a third party claim. If multiple insurers are involved, the one highest on the “liability tree” will be responsible.
Why Article 75 Status Matters
Whether an insurer is deemed an Article 75 Insurer can have significant claims handling and financial implications:
Requires paying third party claims they otherwise could have avoided
Triggers potential disputes with other insurers over liability
Forces them to recover amounts paid from their own policyholder
No recourse if another insurer is higher up the chain of liability
So insurers will generally resist being designated as an Article 75 Insurer if they have contractual grounds to deny coverage. The status places liability on them that would not otherwise exist.
While complex, the concept helps assign responsibility for losses, ensuring victims have an insurer to claim against. So Article 75 plays an important role in the UK system for compensating victims of road accidents.
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