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Insurance Question

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Friend of mine had a limited company and his van is on finance in the name of the limited company. The V5 is in the name of the company but the insurance is in his personal name.

 

I don't think there is anything wrong there as you can insure (with owners permission) a vehicle that does not belong to you. but - the ltd company is now dissolved, he is still paying the finance.

 

How does he stand legally with regard the V5 being in the name of a dissolved company and the insurance in own name.

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As insurance certificates cover the vehicle with that registration number, and as it is the 'user' rather than the owner who is legally required to arrange insurance, it doesn't matter who owns it providing that the insurance company was fully notified of the situation when the policy was taken out and were happy with it. Were they? Did they know the V5C had the company name on it? Do they know that the company is now dissolved? He should tell them, they may consider it a material fact. Potentially there are complications if the legal owner and the insured aren't the same person and the vehicle is stolen or destroyed and the insurer agrees to pay a total loss. Who is entitled to receive the total loss payment?

 

 

I couldn't tell you exactly what the registered keeper rules say about having the dissolved company on the V5C but surely it needs to be transferred to your friends name?

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Just checked.

The insurer is aware that the van is registered in the company name but not that the company has been dissolved. The finance company are also not aware that the company has been dissolved. The payout on a total loss is an interesting one and not sure who gets it, the registered keeper or the insured.

 

The whole thing is further complicated in that he is going through a divorce that is quite acrimonious so wants as little in his name as possible.

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The insurer is aware that the van is registered in the company name but not that the company has been dissolved. The finance company are also not aware that the company has been dissolved. The payout on a total loss is an interesting one and not sure who gets it, the registered keeper or the insured.

 

Or the finance company (to the extent of the outstanding finance anyway). Is their interest noted on the policy? It would depend if the finance was secured on or linked to the vehicle in some way, or whether it was just a personal loan.

 

If there were a total loss insurers would probably ask for evidence of ownership, particularly the purchase invoice. Who is shown as the purchaser on that? If it's only the now dissolved company then I'm not sure who they would pay. I don't know what the rules are for money owing to a dissolved company.

 

 

Do DVLA permit the registered keeper to be a legal entity that no longer exists? I don't know but it would seem unlikely to be permitted.

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You cannot insure something which you have no financial intrest in.

 

I cannot insure my neighbours car but I can insure myself against a claim I I had an accident in it.

 

 

If the vehicle is in dissolved company's name then it should of been returned to lease company on date of dissolvent.

There is now potentially a minefield on technicality points.

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You cannot insure something which you have no financial intrest in.

 

I cannot insure my neighbours car but I can insure myself against a claim I I had an accident in it.

 

 

If the vehicle is in dissolved company's name then it should of been returned to lease company on date of dissolvent.

There is now potentially a minefield on technicality points.

 

This is what I am concerned about. Its not a lease but full HP with not a lot owing. I have told him to clear the finance and then transfer to his name but the divorce has complicated things.

 

I am trying to help him get his 'house in order' so may have to delve deeper with this.

 

Thanks

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The vehicle is an asset of the company and has to be liquidated and the money put into company accounts.

This then goes towards paying company debts off, if there is any

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If no debts and the company compulsorily would up them the govt gets the money. The lease co will need to know about this and possibly others as well.. he could end up paying off the HP and still lose the van and wont be able to transfer the assets because he is no longer entitled to make those decisions. The insurer will wnat to know about this as they ahve to assess who owns the vehicle and who is "the insured". The wording of the policy will help him resolve this to some degree

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The company was voluntarily closed as no longer needed to be Ltd, doing same job but as sole trader. The accountant that dissolved the company should have sorted this at the time. There were no debts, other than the van. It was only dissolved last year and closing accounts have not been produced yet as far as I know. I guess he could buy the van from the company for the value of the outstanding finance and clear the loan, or clear the loan and just change the V5 to personal name.

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he should have done that at the time. if the comany is gone the the assets arent the company's to decide what to do with. I suspect that sorting this out propery will cost more than the van itself. He could ask the accountant what they ahve done with the asset and take it from there otherwise the van may belong to HMG or it may belong to finance co or may belong to shareholders (him)

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A key question we still don't know the answer to is who is the named purchaser on the purchase invoice? That would be the principal evidence of who is the legal owner.

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Hi All,

Just an update. As suggested it was complicated due to the finance and V5 being in the name of the limited company. Well all solved now as the van has been repo'ed with about £500 owing. Unfortunately due the Ltd company being dissolved they would not take payment - should have been done prior to dissolve (words with accountant I think). Friend not too fussed as van had over 100k on the clock and was starting to cost money. Also found out that the van had a charge against it due to unpaid parking fines - all in the name of the Ltd Co - hopefully these will now disappear as they are in the name of the company.

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