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MCN investigation reveals PCP legal grey area

Is your new bike insured properly?

Taking out a Personal Contract Plan (PCP) is a fantastic way to bag yourself a new bike for low monthly payments. There are very few downsides, but there is one which could unknowingly cause owners problems with their insurance – and that’s the fact you don’t own the bike.

Several MCN readers have discovered problems while trying to insure their bikes, in some cases discovering that their insurers could not cover them at all if they were not the legal owner of the bike.

This is an issue unique to PCP, where you are the registered keeper, but not the legal owner. With normal finance you are classed as the legal owner from day one, albeit the finance company can repossess your bike if you stop paying. But with PCP you’re not the owner.

Source an insurance quote online, and none of the comparison sites we tried ask if you’re the owner, while only one broker’s website we’ve tried asked the question. When we called brokers to discuss it, one was aware of PCP and stated that they didn’t usually cover PCP, although they were able to quote on this occasion, while another was unfamiliar with what PCP was, and their quote more than doubled.

So what should you do, and could declaring yourself as the owner of a PCP’d bike invalidate your insurance? It appears that this is still a grey area, so we asked Jon Edwards at Bikelawyer to explain.

“In the event of an accident, the insurers would have to pay out regardless because of the Road Traffic Act, then if they believe there to be an issue they can try to recover their outlay from the policy-holder.

“Insurers can’t hide behind just putting items of great importance deep within a policy document as anything that’s materially significant is meant to be clearly laid out. If they never asked you about the bike’s ownership, you could potentially claim that the policy was mis-sold.


If your policy lists you as the owner, we’d advise checking you’re covered.




If they did ask you outright, or made it very clear that they only insure owner-riders, they could argue it was material non-disclosure and they wouldn’t have issued the policy had they known.” But will they?

The insurers MCN spoke to last week were not as definitive as you might expect. In most cases, they say that although the paperwork isn’t quite right it doesn’t matter but the notion of an insurer promising not to reject a claim, despite inaccurate paperwork and declarations, makes us very uncomfortable. This is reinforced by insurers stating that: “Failure to disclose correct and complete information to the best of your knowledge and belief may result in increased premiums, refusal of a claim or not being fully paid, your policy being cancelled or being made null and void.”

MCN is now conducting a full investigation, but if you have a bike on PCP, we suggest you contact your insurer to clarify your cover if you’re listed as the owner. And if you’ve had any problems with insurance on a PCP bike, we’d like to hear from you (E-mail


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