The Eric Whitehead Partnership

Most victims of road traffic accidents receive compensation from the person who caused the accident or, more accurately, their insurers. However, what if the people who cause such accidents either have no insurance or are untraceable?

In 1946, the Motor Insurers’ Bureau (MIB) was established as a central fund to provide a means of compensating the victims of accidents caused by such drivers. The MIB operates what if known as the UK Guarantee Fund which applies in the whole of the UK including the Isle of Man, the Channel Islands and Gibraltar. The MIB functions under two separate agreements between the UK Government and the motor insurance industry, namely the Uninsured Drivers’ Agreement, which requires the MIB to meet unsatisfied civil judgements against identified but uninsured drivers, and the Untraced Drivers’ Agreement, which requires the MIB to consider applications for compensation from the victims of “hit and run” accidents or accidents where the driver at fault cannot properly be identified.

Any claim must be made within three years of the date of the accident in the case of an injured adult or within three years of their 18th birthday in the case of an injured child. The accident must have been reported to the Police, although a claim can still be made in the event of the third party not being charged with any criminal offence.

In the case of personal injury, there is no limit to the level of compensation which can be awarded. In the case of property damage, the MIB does not pay the first £300 of any claim and is not liable for any sums beyond a limit of £250,000. The MIB is a fund of last resort and will not pay out if a victim has already been compensated from another source.

The MIB is funded by all motor insurers and the ultimate cost falls to law abiding motorists through their motor insurance premiums.

Since 1946, the MIB has paid out in excess of £2 billion in compensation. The MIB’s own studies show that, in 2006, uninsured drivers accounted for more than 36,000 crashes and 27,000 injuries. In the same year, more than 180 people were killed and 360 seriously injured as a result of a collision with an uninsured driver.