Chapter 1: Motor Insurance

Question 1

What are the four levels of motor insurance cover?

Answer 1

• Road Traffic Act
• Third party only
• Third party, fire and theft
• Comprehensive

Question 2

What are the features of Road Traffic Act cover?

Answer 2

• Unlimited liability for bodily injury
• £1.2 million for loss or damage to property
• Indemnity for claimant’s costs
• Hospital charges (if applicable)

Question 3

What does the Third EU Motor Insurance Directive require RTA cover to include?

Answer 3

• Cover for the vehicle required by the country in the EU which it’s in.
• Liability cover for the passengers as employees of the driver while in the course of employment.

Question 4

What does Third Party Only cover?

Answer 4

• Cover for vehicles while not on a road
• £20 million for third party property damage
• Potentially cover for accidents when the vehicle does not belong to the driver
• Potentially cover for anyone using the vehicle with permission of the policyholder
• Legal costs

Question 5

What does Third Party, Fire and Theft cover add?

Answer 5

• Cover for damage caused by fire, lightening or explosion.
• Damage while stolen or being stolen
• Stolen and not recovered

Question 6

What does comprehensive cover add?

Answer 6

• Cover for other accidental or malicious damage to the vehicle.
• Personal accident cover for the insured or their spouse
• Medical expenses
• Personal belongings and clothing

Question 7

Give some extensions of a motor policy.

Answer 7

• Glass breakage
• Personal belongings and clothing
• Young additional drivers
• Loss of use
• Personal accident benefits
• Foreign use
• Election use
• Racing
• Caravans and trailers
• Misfuelling

Question 8

Give some exclusions of a motor policy.

Answer 8

• Unlicensed drivers
• War risks
• Sonic bangs
• Use outside of that permitted by the insurer

Question 9

What does a standard motorcycle policy include?

Answer 9

• Accidental damage (same as private vehicles)
• Legal liability (Same as private vehicles)
• No personal accident benefits

Question 10

Give some extensions to a motorcycle policy.

Answer 10

• Trailers
• Riding other motorcycles
• More than one cycle insured with the same insurer
• Invalid carriages (e.g. mobility scooters)

Question 11

What is commercial motor insurance?

Answer 11

Cover for goods and passenger vehicles and other special-purpose vehicles e.g. farm vehicles.

Question 12

What does commercial vehicle insurance cover as standard?

Answer 12

Generally the same as that available for motorcycles and ordinary cars.

Question 13

What are the differences in commercial vehicle cover in respect of trailers?

Answer 13

• Articulated trailers are offered third party cover while attached (comprehensive is available)
• Disabled motor vehicles are not covered if the trailer is only covered by third party insurance (comprehensive will cover the vehicle)

Question 14

What is omitted from a commercial vehicle policy that is included in a private one?

Answer 14

• Driving other vehicles (due to the extensive variety of commercial vehicles)
• Personal benefits (e.g. medical expenses, cover for belongings).

Question 15

Give some extensions of a commercial motor policy.

Answer 15

• Third party property damage
• Medical expenses
• Windscreen cover
• Indemnity to hirers
• Carnivals
• Loss of use

Question 16

How does the ‘use of insured vehicle’ exclusion differ to that of a private motor policy?

Answer 16

An insurer is not liable of the vehicle is used in a way not stated in the schedule or if it is used for racing or pace-making.

A private one is less specific.