Chapter 1

Question 1

Particular Risks

Answer 1

• Localised in cause and effect
• Produces losses ranged from minor to major outlays
• Examples: Damage from accidents or localised natural events

Question 2

Fundamental Risks

Answer 2

• A risk that is uninsurable due to the insurance markets inability to cater for it
• Example: War

Question 3

Catastrophic Risk

Answer 3

• Flood and Storm Damage is covered
• Damage by nuclear explosion or contamination is not

Question 4

Five Main Categories of Perils in Motor Risks

Answer 4

• Death or Bodily Injury to vehicle occupants
• Death or Bodily Injury to other road users
• Damage to other’s property
• Vehicle Damage by accident, storm, flood or vandalism
• Damage by fire or theft

Question 5

Legal Definition of Negligence

Answer 5

The failure to do something a reasonable person would do, or something a prudent person would not, leading to damage or injury
(Blyth v. Birmingham Waterworks Company, 1856)

Question 6

Res Ispa Loquitur

Answer 6

“The thing speaks for itself”
Where the onus of proof shifts to the defendant

Question 7

Vicarious Liability

Answer 7

Liability of one party (e.g an employer) for the actions of another (e.g an employee) in the course of employment

Question 8

Limitation for PI Claims under the Limitation Act 1980

Answer 8

Three years from the date of damage or when the claimant becomes aware of it

Question 9

Latent Damage Act 1986

Answer 9

Extends the limitation period for property damage by three years from the time of discovery, with a maximum of 15 years

Question 10

Three Forms of Trespass

Answer 10

• Trespass to the person
• Trespass to goods
• Trespass to land

Question 11

Two Types of Nuisance

Answer 11

• Public Nuisance
• Private Nuisance

Question 12

Parish v. Judd 1960

Answer 12

A temporarily unlit parked vehicle near a street lamp did not constitute nuisance as there was no fault

Question 13

Automated and Electric Vehicles Act 2018

Answer 13

Injured drivers of autonomous vehicles are treated like innocent passengers and can claim compensation from their motor insurers

Question 14

What % of theft claims are theft of the vehicle itself?

Answer 14

Approximately 70%

Question 15

Riot Compensation Act 2016

Answer 15

• Limited cover for damage caused by riot, only if insurance doesn’t cover it
• Maximum compensation is £1million per claim

Question 16

Frequency in Motor Insurance

Answer 16

The ratio of claims or accidents to the exposure

Question 17

Vehicle Years

Answer 17

One vehicle insured for 12 months equals one vehicle year, two vehicles insured for 6 months each also equals one vehicle year

Question 18

The Road Traffic Act 1930

Answer 18

Introduced compulsory motor insurance in the UK

Question 19

Two Main types of UK Law

Answer 19

Civil Law (tort and contract) and Criminal Law

Question 20

Penalties under Criminal Law for Negligent Driving

Answer 20

• Fines
• Driving License Endorsement
• Disqualification
• Imprisonment

Question 21

Road Traffic Act Parts

Answer 21

Part I - Principle Road Safety Provisions
Part II - Construction and Use of Vehicles and Equipment
Part III - Licensing of Drivers of Vehicles
Part IV - Licensing of Drivers of Heavy Goods Vehicles
Part V - Driving Instruction
Part VI - Third-Party Liabilities
Part VII - Miscellaneous and General

Question 22

Section 143 of the RTA

Answer 22

It makes it an offence to use, cause or permit the use of a motor vehicle on a road without an insurance policy complaint with Part VI of the Act

Question 23

Exempt Vehicles from Compulsory Insurance under Section 144

Answer 23

Vehicles owned by government bodies, the NHS and military vehicles

Question 24

Legal Definition of “Motor Vehicle” under Section 185

Answer 24

A mechanically propelled vehicle intended or adapted for use on roads

Question 25

Definition of “road” under Section 192(1) of the RTA 1988

Answer 25

A highway or any other road to which the public has access, including bridges

Question 26

Liability Coverage under Section 145

Answer 26

The policy must cover liabilities for - Death or Bodily Injury to any person - Property Damage caused by or arising out of the use of a vehicle on a road or public place

Question 27

Deregulation Act 2015

Answer 27

- Policies can be effective even if the certificate is not delivered immediately - No legal obligation to return certificates upon policy cancellation - Insurers no longer need to recover certificates to avoid liability after cancellation

Question 29

What is the purpose of Section 148 of the RTA?

Answer 29

To ensure innocent victims of motor accidents are compensated

Question 30

When is car-sharing considered private use under Section 150?

Answer 30

- the vehicle carries up to 8 passengers - fares do not exceed running costs - payment arrangements are made before the journey

Question 31

Road Traffic (NHS Charges) Act 1999

Answer 31

NHS hospitals recover costs via the Compensation Recovery Unit (CRU)

Question 32

What is the purpose of the EU Motor Insurance Directives

Answer 32

- harmonise laws of EU member states - facilitate freedom of travel - ensure appropriate levels of cover - streamline claims procedures across states

Question 33

First Motor Direction 1972

Answer 33

- each member state was required to have compulsory insurance covering third-party injury liability - abolished insurance checks at EU frontiers - initially required green cards for UK drivers but later discontinued

Question 34

Second Motor Directive (1984)

Answer 34

- compulsory third-party property damage, with a UK minimum cover of £250,000 - required all member states to set up guarantee funds for injury and property damage claims caused by uninsured or unidentified drivers

Question 35

Third Motor Directive (1990)

Answer 35

- minimum cover in other member states had to match the higher of the cover required in the home or host state - liability for passenger injuries was covered under motor policies

Question 36

Fourth Motor Directive (2000)

Answer 36

- ensuring accident victims could identify the responsible vehicle’s inter within two months - the UK has adapted through the use of MID

Question 37

Fifth Motor Directive (2005)

Answer 37

Increased TPPD liability limits to £1 million and later to £1.2 million