The Motor Insurance Bureau (MIB)

When compulsory third party motor insurance was introduced in 1930 it did not entirely achieve its objective. For example, a few motorists neglected to obtain even the minimum insurance required, despite the severe penalties for non-compliance with the Road Traffic Act, and they were just the people who had no means to satisfy any third party bodily injury claim that might be made against them. Also, a motorist might make fraudulent statements when proposing for insurance, which would entitle the insurers to repudiate liability for any claim, to the detriment of a third party.

In 1946, after discussion between motor insurers and the Government, the Motor Insurance Bureau (MIB) was formed to ensure that a road victim sustaining injury caused by a motor vehicle is not deprived by reason of absence of or ineffective insurance of any damages to which he might be entitled.

The Road Traffic Act 1988 requires all insurers transacting motor insurance business in Great Britain to be members of MIB. The Motor Insurance Bureau operates by virtue of two agreements with the Secretary of State for the Environment:

Uninsured Drivers
If damages are awarded by a court in respect of a liability which is required by law to be covered by car insurance and such damages or any part of them remain unpaid for seven days after the judgement becomes enforceable, the MIB will pay the non recovered amount, including any interest and costs, to the person in whose favour the judgement has been given.

Untraced Drivers
Where the motorist with no motor insurance cannot be traced the injured party is unable to substantiate a claim at law for damages because he is unable to name a defendant. Under this agreement the MIB has given an undertaking to make a payment, provided that it can be established that on the balance of probabilities the untraced motorist would be liable to pay damages to the accident victim in respect of death or bodily injury. As far as property damage is concerned, the MIB will only deal with it if the driver is known, and in addition the Third Party or their property insurer, will have to pay the first £175 of any claim.

Since there is no insurer concerned, the MIB will deal with such claims itself. In practice, it appoints a member to act in negotiations and there is provision for an appeal from the MIB’s decision in such cases. The Motor Insurers’ Bureau attempts to recover amounts paid from the negligent driver but in practice this is seldom possible. Another function of the MIB is to guarantee to foreign Governments performance by British motor insurers under the terms of the insurance certificates issued by them for foreign travel.