Test riding a bike - no insurance cover

[Silage]

I have a feeling this has been covered in a thread before but couldn't find it by searching.

A guy I know goes to a bike shop in Chch a few months ago to test ride a bike. He is given the normal blah blah about needing to pay the excess if he drops it. He does drop it and so pays out the $1000 excess. Then a couple of months later gets a letter from the shop's insurance company saying that he owes the remainder of the repair costs. If he had existing cover on a bike it may have covered this but as he doesn't yet have a bike, he had no bike insurance. But like others who he has talked with, the expectation is that the shop's insurance covers test ride accidents.

If he has been told correctly, then the excess he paid was the excess the bike shop has to pay on its insurance and then the insurance company can chase the person responsible for the remainder. It would seem that bike shops do not make this clear when we take a bike for a test ride.

Does anyone else have experience with this. If the test rider is not covered, then they take quite a risk when taking a bike out.

[Mikkel]

Dealer or not. If you lend out a vehicle to someone else, you can be held accountable unless you very clearly state that they are not going to be covered by insurance.

Anyway, this sounds pretty dodgy to me. There was an agreed upon excess, which was paid as I understand it - that should be the end of the matter as far as the potential customer is concerned.

[Juzz976]

I wonder if you can get insurance to cover you riding any bike you like as long as your on your full. I loose a bit of enjoyment riding another bike as I'm not insured to ride it.

[MSTRS]

Insurance is on a particular bike/whatever, with an variable excess pertaining to anyone riding that bike. As long as they hold an appropriate licence...
I have heard that a person with full cover on a bike, may be covered on another bike for the purposes of a test ride...BUT don't quote me.

[Tank]

I have a feeling this has been covered in a thread before but couldn't find it by searching.

A guy I know goes to a bike shop in Chch a few months ago to test ride a bike. He is given the normal blah blah about needing to pay the excess if he drops it. He does drop it and so pays out the $1000 excess. Then a couple of months later gets a letter from the shop's insurance company saying that he owes the remainder of the repair costs. If he had existing cover on a bike it may have covered this but as he doesn't yet have a bike, he had no bike insurance. But like others who he has talked with, the expectation is that the shop's insurance covers test ride accidents.

If he has been told correctly, then the excess he paid was the excess the bike shop has to pay on its insurance and then the insurance company can chase the person responsible for the remainder. It would seem that bike shops do not make this clear when we take a bike for a test ride.

Does anyone else have experience with this. If the test rider is not covered, then they take quite a risk when taking a bike out.


Was it a verbal agreement - or did he sign a loan ageement with the teamr of the test bike loan?

[The Stranger]

If he has been told correctly, then the excess he paid was the excess the bike shop has to pay on its insurance and then the insurance company can chase the person responsible for the remainder.

Yes I have heard of the exact same thing before. i.e. the insurer going the test rider.

Many car 3rd party insurance policies will cover you in someone elses car as that car is effectively the property of a 3rd party - ASB are one.
That of course requires you to have 3rd party cover on say your own car obviously.
Not sure about bikes however.

[Taz]

r.

Many car 3rd party insurance policies will cover you in someone elses car as that car is effectively the property of a 3rd party - ASB are one.
That of course requires you to have 3rd party cover on say your own car obviously.
Not sure about bikes however.

So if this is the case then I could insure both mine and the wifes car for third party and we could then swap vehicles and both be full covered? Or do they still just payout for the other person vehicle who ya hit?

[imdying]

Was it a verbal agreement - or did he sign a loan ageement with the teamr of the test bike loan?If he signed nothing then they specifically said he would be covered except for the excess :msn-wink: And if they don't like it, they're welcome to take him to court, and if they're not willing to do that they can go choke on a donkeys diddle.

[Hiflyer]

It is common practice for insurance companies to chase the person at fault for the rest of the money, too bad nothing was signed..

[CookMySock]

[...] Then a couple of months later gets a letter from the shop's insurance company saying that he owes the remainder of the repair costs.This has been covered dozens of times.

It is standard operating procedure for the insurance company to bluff you into paying up. You have no legal obligation to pay them anything.

For myself, I would file the letter away carefully and do nothing. You will likely receive further bluff and bluster letters from them, and I'd just keep them on file as well.

Steve

[Oscar]

Yes I have heard of the exact same thing before. i.e. the insurer going the test rider.

Many car 3rd party insurance policies will cover you in someone elses car as that car is effectively the property of a 3rd party - ASB are one.
That of course requires you to have 3rd party cover on say your own car obviously.
Not sure about bikes however.

I suggest you read that again - most policies say that if you are driving another car that is uninsured, then any third party damage you cause is covered (but not to the car you're driving).

[Oscar]

This has been covered dozens of times.

It is standard operating procedure for the insurance company to bluff you into paying up. You have no legal obligation to pay them anything.

For myself, I would file the letter away carefully and do nothing. You will likely receive further bluff and bluster letters from them, and I'd just keep them on file as well.

Steve

The only thing that has been covered here a dozen times is the fact that you are a tool.

By paying the excess, this guy has effectively admitted liability.
Unless he has signed the standard test ride form, he may well be liable for the rest.

[p.dath]

I don't think this is clear cut. A verbal contract is clearly in existance. If both parties agree on that contract then it may be simpler.

There may be some remedy under the Consumer Guarantees Act. Was the insurance that the test rider was told he had fit for the purpose? Probably not.

I suspect the insurance company will sue the test rider, and the test rider will need to sue the dealer.

Horrible situation.

[Oscar]

Dealer or not. If you lend out a vehicle to someone else, you can be held accountable unless you very clearly state that they are not going to be covered by insurance.



You can be held legally liable if it's your fault.
If you are obviously not at fault, then it isn't your problem (legally speaking).

[AllanB]

What shop please. Good to know to ensure any paperwork is signed of prior to a future test ride.

Does anyone actually read any of the form they ask you to sign before a test ride? Must pay more attention in the future. :yes:

[CookMySock]

The only thing that has been covered here a dozen times is the fact that you are a tool.This public name-calling business only makes you look weak and out of control. Keep your dirty mouth in check and focus on the problem at hand, rather than putting people down you disagree with.

Steve

[sleemanj]

Insurance companies will try to recover money in any way they can, fair enough, that's their business.

If I were your friend, I would formally write a letter to the insurance company indicating your intention to not pay as you dispute that you have any liability to the insurers, and invite them to take him to the disputes tribunal (or where-ever) if they so desire.

Likely that's how it would need to be resolved anyway.

[Oscar]

This public name-calling business only makes you look weak and out of control. Keep your dirty mouth in check and focus on the problem at hand, rather than putting people down you disagree with.

Steve


Maybe if you thought before posting stupid advice, people wouldn't feel obliged to point out what a tool you are.

Where did you get this from?


It is standard operating procedure for the insurance company to bluff you into paying up. You have no legal obligation to pay them anything.

The idiots guide on how to get sued?

BTW - Dirty mouth?
If I had a dirty mouth, I would have called you a fucking tool.

[Oscar]

Insurance companies will try to recover money in any way they can, fair enough, that's their business.

If I were your friend, I would formally write a letter to the insurance company indicating your intention to not pay as you dispute that you have any liability to the insurers, and invite them to take him to the disputes tribunal (or where-ever) if they so desire.

Likely that's how it would need to be resolved anyway.

Excellent advice.
Also send the insurer a copy of whatever your friend signed, or his recollection of what he signed and/or was told by the dealer.

[YellowDog]

If an excess has been paid, what has it been paid for?

Insurance one would presume and hence the end of any arguament.

If they believe they have a case, then where is the signed paperwork?

Also, if you paid $1k then what does the receipt paperwork say?

Sounds really dodgy.

Name and shame!

[Oscar]

If an excess has been paid, what has it been paid for?

Insurance one would presume and hence the end of any arguament.

If they believe they have a case, then where is the signed paperwork?

Also, if you paid $1k then what does the receipt paperwork say?

Sounds really dodgy.

Name and shame!

The excess is the uninsured portion of any claim (i.e. the bit that the dealer must pay). So if you pay it, you are admitting that the accident was your fault. And since you're not a party to the insurance, paying it, in itself, could be construed as an admission of liability, because if you're liable for the dealers bit, you're liable for the rest, too.

[YellowDog]

The excess is the uninsured portion of any claim (i.e. the bit that the dealer must pay). So if you pay it, you are admitting that the accident was your fault. And since you're not a party to the insurance, paying it, in itself, could be construed as an admission of liability, because if you're liable for the dealers bit, you're liable for the rest, too.
Ok - So it's not an excess, it's a down payment.

[Matt_TG]

Bear this in mind ...

The contract of insurance in this case is between the owner of the bike (or who is legally liable for the loss - it could be under a dealer / finance agreement), which is the Bike Shop; and the insurance co.

The excess is the part of the claim that the insured (the Bike Shop) must bear. It's effectively the first part of the loss that is uninsured.

The Bike Shop asked your friend to pay the uninsured part, which they did. This was a private arrangement between the Bike Shop and the Test Rider, nothing more.

The Insurance Co settled the claim, and in doing so, took on all rights that the Bike Shop had as owner (called subrogation), and therefore gained themselves the right to pursue costs from the third party, the Test Rider.

They can do this - the Bike Shop agreed to it when they took out insurance. It's an essential part of Law.

To me the Test Rider's beef is with the Bike Shop.

My suggestion to the Test Rider is to look into what representations were made by the Bike Shop. IF the Bike Shop inferred (by way of a document or verbally - both a 'contract') that any mishap would be limited by the amount of the excess only, the Test Rider could take that further against the Bike Shop at Disputes. That principle is essentially wrong as insurers can pursue, they are not allowing for subrogation to occur.

Another aspect is to look to is whether the Test Rider becomes an "Insured Party" by agreeing to test ride the bike. Perhaps the policy of insurance extends the "Insured" to include test riders (if not it should be looked at), the same as a construction policy can extend to include subcontractors. If this is the case then Insurers cannot recover costs from the Test Rider as he is now an Insured, not a Third Party.

Messy messy messy. Good luck, this can be a minefield.

[steve_t]

So really the dealer should say "You break it, you buy it"?

[YellowDog]

So really the dealer should say "You break it, you buy it"?
No.

The dealer should say that; before you take a test ride do fully consider that whilst the bike does have insurance cover, you will not be covered in any way shape or form and hence any damage is down to you.
(though I suspect that the insurance company would have covered any third party)

I wouldn't pay on the grounds that I was lead to believe that the bike would be insured and my totally potential liability was $1k.

[Matt_TG]

So really the dealer should say "You break it, you buy it"?

Pretty much

[Matt_TG]

I wouldn't pay on the grounds that I was lead to believe that the bike would be insured and my totally potential liability was $1k.

That's the stance the Test Rider should take

[AllanB]

Another aspect is to look to is whether the Test Rider becomes an "Insured Party" by agreeing to test ride the bike. Perhaps the policy of insurance extends the "Insured" to include test riders (if not it should be looked at), the same as a construction policy can extend to include subcontractors. If this is the case then Insurers cannot recover costs from the Test Rider as he is now an Insured, not a Third Party.

Bloody good post :yes:

I've always 'presumed' possibly quite wrongly that the bike shops insurance would indeed cover you as an insured or nominated rider, thus no responsibility beyond the initial excess ($1k appears standard). This will need to be clarified on any future test rides.

Again, what shop in CHCH?

[Kickaha]

If I had a dirty mouth, I would have called you a fucking tool.

And you would have been right

[The Stranger]

I suggest you read that again - most policies say that if you are driving another car that is uninsured, then any third party damage you cause is covered (but not to the car you're driving).

There are of course different wordings. The intent was not to suggest all are the same. But unless that ASB wording has changed in the last 6 months you are covered for the vehicle you are driving too if it is not your own.
It was not intended as all emcompassing iron clad advise and people should check their own policies.
It was intended to say that this is available and should you desire it.

[Mikkel]

Maybe if you thought before posting stupid advice, people wouldn't feel obliged to point out what a tool you are.


I believe we are getting towards the core of the issue here...


The excess is the uninsured portion of any claim (i.e. the bit that the dealer must pay). So if you pay it, you are admitting that the accident was your fault. And since you're not a party to the insurance, paying it, in itself, could be construed as an admission of liability, because if you're liable for the dealers bit, you're liable for the rest, too.

Well, if you pay a $1000 excess - that to me indicates that you are under the assumption that you are covered by insurance. I sure as hell wouldn't be paying an excess if there was no insurance cover in the first place, that's just bollocks.


The dealer should say that; before you take a test ride do fully consider that whilst the bike does have insurance cover, you will not be covered in any way shape or form and hence any damage is down to you.

And if they don't clearly inform you of this they are actually themselves partly liable for any and all damages incurred by the testrider.
Unless you, as the owner, clearly and truthfully informs anyone borrowing your vehicle about what liability coverage they are under part of the blame will fall on you.

As such, if the bike shop told the testrider that he was covered beyond the excess - and it turns out he isn't - then the bikeshop would be liable for any and all damages exceeding the $1000 "excess".

All of this does indeed sound a bit dodgy. I guess the lesson to take home from this is to ensure you got your arse covered before heading out on a testride. And neither should you pay any "excess" unless you know that you are covered by the related insurance policy.

[Tank]

This has been covered dozens of times.

It is standard operating procedure for the insurance company to bluff you into paying up. You have no legal obligation to pay them anything.

For myself, I would file the letter away carefully and do nothing. You will likely receive further bluff and bluster letters from them, and I'd just keep them on file as well.

Steve

Firstly - without having all the information and seeing the detail of the policy - you have no fucken idea if he has legal obligation to pay or not. You are like a bush lawyer, but somewhat less educated.

Still its not like you are changing your tune - your usual respose is to run and deny - others may select to work it out properly. Hiding and being gutless might work for the short term, but in the end you end up a loser. You would seem to be proof positive of that.


Ah that sucks bro. Yeah bikes are for goofing off on, and sometimes we screw it up - thems the breaks! This time you got off lightly.

Right, any damage to anyone else ? Any liability ? If so, deny everything and refuse to discuss the accident with anyone. Disappear into the long grass, and say nothing. Fix your own bike with your own money, and let your sore knee mend itself etc. If anyone wants to knock on your door and talk about the incident, tell them they are at the wrong place. If the feds turn up, tell them u dunno jack about that, and shut the door and go back to what you were doing. Letter from some insurance company demanding payment? bew hew hew, chuck it in the bin. Life goes on. Dont FFS admit the whole thing to the feds in the hope things will be better.. :rolleyes:

DB



The only thing that has been covered here a dozen times is the fact that you are a tool.

a dozen times pffft - 100's of times.


This public name-calling business only makes you look weak and out of control. Keep your dirty mouth in check and focus on the problem at hand, rather than putting people down you disagree with.

Steve

And posting crap advise pretending oyu know something about anything makes you look like - well you. - and thats 'not a good thing' (tm)

Anyway - the first step I would recommend is to ask the bike shop for a copy of the 'loan agreement' where he agreed to any terms, and for a copy of the insurance policy.

Im guessing that the agreement between the bike shop and the insurance company requires for the bike shop to have signed forms for test rides.

Now they have found out that there isnt one - then they are possibly saying 'ohh we should not have paid that' and are chasing you (and probally the bike shop as well).

So - gather all the information you can and try to establish WHY they beleive that you are at fault.

THEN you can argue their position.

OH - and ignore anything DB says - thats only going to make matters worse.

[Oscar]

Well, if you pay a $1000 excess - that to me indicates that you are under the assumption that you are covered by insurance. I sure as hell wouldn't be paying an excess if there was no insurance cover in the first place, that's just bollocks.



.

The point here is that it's not your policy.
If you pay the dealer's excess (i.e. his uninsured loss), you are admitting fault.

[Hiflyer]

I'm test riding bikes tomorrow, I'd better make sure that all I'd have to pay is an excess! Do bike shops usually have a form for you to sign?

[Tank]

I'm test riding bikes tomorrow, I'd better make sure that all I'd have to pay is an excess! Do bike shops usually have a form for you to sign?

not a matter of usually - but some do, others dont.

Id go with ones that do - that clearly identifies your obgliations.

[Hiflyer]

not a matter of usually - but some do, others dont.

Id go with ones that do - that clearly identifies your obgliations.

Yea, Haldanes/holeshots/cyclespot aint exactly small dealers so hopefully they'll have something

[Tank]

Yea, Haldanes/holeshots/cyclespot aint exactly small dealers so hopefully they'll have something

if in doubt - just ask them for one.

[Thani-B]

Yea, Haldanes/holeshots/cyclespot aint exactly small dealers so hopefully they'll have something

Colemans, Mt Eden and Red Baron all have forms to sign. Think they all had $2500 excesses as well.

[Mikkel]

The point here is that it's not your policy.
If you pay the dealer's excess (i.e. his uninsured loss), you are admitting fault.

Still, if you pay an excess (or are being told that you are paying one), that implies that there is insurance cover. Otherwise the $1000 must be considered reparations or compensation - not an excess.

[Oscar]

Still, if you pay an excess (or are being told that you are paying one), that implies that there is insurance cover. Otherwise the $1000 must be considered reparations or compensation - not an excess.

Oh yeah - it implies that there's cover and a claims been made.
But by paying the dealer's uninsured portion, you're allowing the insurer to assume that you admit liability.

The insurer in this case only has obligations toward the insured (i.e. the dealer), and not the rider. Having paid the dealer, and assuming a lack of a contractual agreement between the dealer and the rider, the insurer would be perfectly entitled to treat the rider as an at fault third party.

[Mikkel]

Oh yeah - it implies that there's cover and a claims been made.
But by paying the dealer's uninsured portion, you're allowing the insurer to assume that you admit liability.

The insurer in this case only has obligations toward the insured (i.e. the dealer), and not the rider. Having paid the dealer, and assuming a lack of a contractual agreement between the dealer and the rider, the insurer would be perfectly entitled to treat the rider as an at fault third party.

Be that as it may. I'd say you've been hoodwinked and could drag the bikeshop to small claims, get your money back and have the payment annulled. Whether that got a snowball's chance in hell of holding up, I don't know. But the bikeshop would be guilty of misconduct if they allow the insurance company to pursue this course of action after telling the testrider that he is insured. If they haven't told the testrider he was insured, then why would he pay an excess? If the bikeshop is insured, but that insurance does not cover testriders on their bikes, then they have a legal obligation to clearly inform testriders accodingly. At best it's a misunderstanding, at worst it's deliberate misinformation - the former can be rectified, the latter is bad for business once word gets around.

[Oscar]

Be that as it may. I'd say you've been hoodwinked and could drag the bikeshop to small claims, get your money back and have the payment annulled. Whether that got a snowball's chance in hell of holding up, I don't know. But the bikeshop would be guilty of misconduct if they allow the insurance company to pursue this course of action after telling the testrider that he is insured. If they haven't told the testrider he was insured, then why would he pay an excess? If the bikeshop is insured, but that insurance does not cover testriders on their bikes, then they have a legal obligation to clearly inform testriders accodingly. At best it's a misunderstanding, at worst it's deliberate misinformation - the former can be rectified, the latter is bad for business once word gets around.

The scenario I outlined is an extreme one, and is usually stopped by the dealers documentation, but it has happened.

In a situation where the dealer told the rider he was covered and he wasn't, the insurer could decline the dealers claim.

[Silage]

Bear this in mind ...

The contract of insurance in this case is between the owner of the bike (or who is legally liable for the loss - it could be under a dealer / finance agreement), which is the Bike Shop; and the insurance co.

The excess is the part of the claim that the insured (the Bike Shop) must bear. It's effectively the first part of the loss that is uninsured.

The Bike Shop asked your friend to pay the uninsured part, which they did. This was a private arrangement between the Bike Shop and the Test Rider, nothing more.

The Insurance Co settled the claim, and in doing so, took on all rights that the Bike Shop had as owner (called subrogation), and therefore gained themselves the right to pursue costs from the third party, the Test Rider.

They can do this - the Bike Shop agreed to it when they took out insurance. It's an essential part of Law.

To me the Test Rider's beef is with the Bike Shop.

My suggestion to the Test Rider is to look into what representations were made by the Bike Shop. IF the Bike Shop inferred (by way of a document or verbally - both a 'contract') that any mishap would be limited by the amount of the excess only, the Test Rider could take that further against the Bike Shop at Disputes. That principle is essentially wrong as insurers can pursue, they are not allowing for subrogation to occur.

Another aspect is to look to is whether the Test Rider becomes an "Insured Party" by agreeing to test ride the bike. Perhaps the policy of insurance extends the "Insured" to include test riders (if not it should be looked at), the same as a construction policy can extend to include subcontractors. If this is the case then Insurers cannot recover costs from the Test Rider as he is now an Insured, not a Third Party.

Messy messy messy. Good luck, this can be a minefield.

Whoops haven't checked this thread for a couple of days. Interesting input and thanks esp to Matt_TG.

My main aim of posting this was to suggest that you should be careful to understand the extent of your liabilities when test riding from a shop.

I understand from talking to others about this that this is normal practice for all bike shops, just not many people damage the bikes and so no action is taken. If the shops told you about this openly then few people would test ride (ie bad for business).

Apparently some car shops have the policy of one of the staff accompanying people when test driving so that they are then fully covered under the shop's insurance. Bit more difficult with a bike - and who would want to take balast with them on a test ride.

Be warned!!

[ntst8]

Apparently some car shops have the policy of one of the staff accompanying people when test driving so that they are then fully covered under the shop's insurance. Bit more difficult with a bike - and who would want to take balast with them on a test ride.

I have had a bike shop (a few years ago) do the accompany thing by the sales guy leading the test ride on his bike, i wasn't allowed to overtake him but if i happened to lag behind i was free to catch up again. :msn-wink: