Chapter 1 - Motor Insurance Flashcards
What is the minimum motor insurance cover required in order to comply with the road traffic act 1988?
To provide insurance in respect of liability for 3rd party bodily injury or death and 3rd party property damage(limited to 1.2million) and payment of emergency treatment fees
What are the 4 levels of cover for a standard policy?
- road traffic act only
- 3rd party only
- 3rd party, fire and theft
- comprehensive
What are the 3 main classes of insurance?
- private car
- motorcycles
- commercial vehicles
What are the 2 specific exclusions in respect of third party liability
- damage to property owned
- liability covered by any other insurance policy
What is the main difference between third party, fire and theft and comprehensive cover?
Comprehensive cover grants cover for accidental, and even malicious, damage to the insured’s vehicle
What are the optional extensions to a comprehensive private motor policy?
Increase cover for personal belongings Young additional drivers Loss of use Personal accident benefits Elections Racing, competitions, rallies and trials Caravans and trailers Breakdown cover Joint policies
What is the main difference between the standard comprehensive motor policy and the standard comprehensive motor cycle policy?
- accidental damage section excludes theft of accessories/spare parts unless motor cycle is stolen at the same time
- liability section indemnities the insured or their personal representatives in the event of insured death
- there are no personal accident benefits, medical expensive or personal effects cover
What are the main groups of commercial vehicles?
Goods carrying
Passenger carrying
Agriculture and forestry
Vehicles of special construction
Why is ‘diving other vehicles’ cover omitted from the commercial motor cover?
The range of vehicles is so extensive that insurers do not want to encourage the insured to drive other vehicles
Which of the following does not form party of the standard cover that is provided under a comprehensive private motor insurance policyholders?
A accidental damage to insured vehicle
B drivers personal accident benefit
C recovery of a vehicle after breakdown
D recovery of a vehicle to a repairer after an accident
E third party liability cover in event of accident
C recover of a vehicle after breakdown
Under 3rd party only motorcycle policy, what cover is provided as standard?
A damage to clothing and personal effects
B emergency treatment fees
C medical expenses
D personal accident benefits
B emergency medical expenses
Why is there a limit of liability necessary?
Because of the nature of come commercial vehicles which, due to their size and weight and the type of property they may be carrying, could cause considerable damage
What does RTA only cover provide?
- indemnity for bodily injury or death caused to 3rd parties, including passengers: unlimited in amount
- indemnity for loss of or damage to property belongings to 3rd parties: limited 1.2million
- indemnity for claimants coats and expense of handling claim
- cover for charges for emergency medical treatment arising from the car: amount specified in policy
What are the four types of private motor insurance
Road traffic only
Third party only
Third party fire and theft
Comprehensive
What is the minimum amount of cover for damage to third party property for Road Traffic Act Only
£1,200,000 in line with EU and UK commission
What 4 things does RTA cover relate to:
Unlimited indemnity to bodily injury or death caused to third parties
£1.2 million indemnity for loss or damage to property belonging to third parties
Indemnity for claimants costs and expenses of handling claims
Cover for charges for any emergency medical treatment and hospital charges
Under Road traffic act with the third EU motor insurance directive provide
Either:
The minimum cover required by the EU country being visited or the minimum cover required by the country where the vehicle is usually kept (whichever is greater)
Cover for liability to persons in the employment of the insurers when travelling as a passenger in the course of employment: passenger not driver. Driver covered under EL
In addition to providing RTA cover, third party cover provides the following 7 things:
- Cover for vehicles not on a road but remaining within the territorial limits
- £20 million for third party property damage
- Indemnity for accidents which occur whilst the insured is driving a car not belonging to them
- Indemnity to anyone who is driving or using the vehicle on the insurers order or permission
- Indemnity to passengers, employers or business partners should they be held responsible
- Legal costs incurred in the defence of the claim
- Limited cover for legal representation costs following a prosecution for a motoring offence that gives rise to a claim
What are the two specific exclusion that relate to third party liability
1- damage to property including the vehicle owners by the person claiming indemnity under the policy
- Liability covered by any other insurance policy
What additional 3 things are covered on a third party, fire and theft policy that’s not covered on a third party only policy
Cover includes the cost or repairs or compensation to the insured if their vehicle is:
- Damaged by fire, lightning or explosion
- Damaged either during attempted theft or while it is stolen
- Stolen and not recovered
What does third party fire and theft specifically exclude
Loss of use I.e any payment the insured my have to make for example to use taxis whilst their car is being repaired or recovered
In addition to a third party fire and theft policy what does a comprehensive policy cover
Accidental and malicious damage to the insureds car on an all risks basis
What are the 5 exclusions on a comprehensive policy
- Loss or damage to accessories and spare parts unless on the vehicle or in the insured garage
- Wear and tear and depreciation
- Loss of use
- Mechanical and electrical failure or breakdown
- Damage to tyres caused by road punctures or burtsts
Does a comprehensive private car policy provide cover for driving other cars in the same way as third party
Yes but only on third party only cover
What specific excess applies to comprehensive private car policy
A young or inexperienced driver excess
What 3 benefits do comprehensive policies typically include
- Personal accident cover
- Medical expenses usually go limit of £250-£500
- Personal belongings and clothing usually around £250 although £1,000 is uncommon
Under NCD what is the usual discount for one year free of claims
25%
Under NCD what is the discount. For 4 or 5 years free of claims
65- 70%
What happens if you have a claim on your NCD
Drops back 2 years
What are the 11 optional extensions to private motor comprehensive policies
- Breakage or glass- doesn’t effect NCD
- Personal belongings and clothing’s
- Young additional drivers
- Loss of use
- Personal accident benefits
- Foreign use- must extend to provide the minimum cover required by the country being visited , green card provided for up to 39 days
7- elections
8- racing, competitions, rallies and trials
9- caravans and trailers for third party only cover whilst attached to the vehicle
10- breakdown cover
11- joint policies
What are the 8 limitations to private motor policies
- Driving by unlicensed drivers
- Use of the vehicle outside the permitted use
- Contractual liability
- War risks
- Radioactive contamination and explosive nuclear assembly
- Riot and civil commotion in Northern Ireland
- Sonic bangs
- Pollution and contamination unless arising from a single event
What happens to a claim under the road traffic act if the cover is excluded
Insurers still have to pay by they may seek to recover costs from the insured
What is excluded when the vehicle is being used for a purposed outside the description of the use on the cert of motor insurance
Liability for any accident, injury, Loss or damages which occurs
What is peer to peer sharing
Where a car can be used for personal and commercial use and people rent out their vehicles whilst not in use. Usually excluded under a private motor policy
Motor cycle insurance: what are the three main differences between motor cycle and private car insurances
- Although the accidental damage sections till applies there’s no cover for theft of accessories or spare parts unless the motorcycle is stolen at the same time
- Liability section indemnities the insurerd and others permitted to the drive the motorcycle for SDP
- No personal accident benefits and no cover for medical expenses
What are the 4 optional extensions to motorcycle policies
- Trailers
- Driving other cycles
- More than one cycle insured
- Invalid carriages
What are the four types of commercial motor insurance vehicles
- Goods carrying vehicles
- Passenger carrying vehicles
- Agricultural and forestry vehicles
- Special types vehicles such as ambulances, cranes and fork lifts etc
What is commercial vehicle policy primarily concerned with
With the risks attached to the vehicles themselves while they are being driven, left parked or being carried by sea or air between different parts of the UK
What is the third party liability cover for commercial vehicles
- Unlimited indemnity for death or bodily injury to third parties.
- £5 million limit of indemnity to third party property damage but can be as low as £1.2 million
What are the 4 points regarding third party liability in relation to commercial vehicles
- Loading or unloading of the vehicle
- Indemnity to driver- generally anyone may drive the vehicle on the order or the permission of the insured
- Indemnity to user- may allow them to use the vehicle for SDP use
- Indemnity to passengers
5- legal costs
Are spare parts and accessories covered under a commercial vehicle policy
Not when they are detached from the vehicle
What are the two types of trailers covered under. Commercial vehicle policy for third party liability
Articulated and non articulated vehicles- third party only cover whilst attached to the insured vehicle
Disabled mechanically propelled vehicles- third party only cover but no cover for damage to the vehicle in tow or the goods its carrying
What two things that are covered under a private motor policy that aren’t covered under a commercial vehicle policy
Driving other vehicles
Personal benefits ie personal accident benefits, medical expenses, personal belongings and clothing aren’t covered
What are the 9 optional extensions to commercial vehicle damage policies
- Third party property damage limit can be increased
- Medical expenses, personal accident benefits
- Personal belongings and clothing
- Windscreen/ glass cover
- Indemnity to hirers- either without an additional premium and insurers will cover loss, damage or liability arising from the negligence of the insured or subject to an additional premium
- Indemnity to principal- insured may use the vehicle for contract work
- Carnivals
- Sheets and ropes
- Loss of use- up to 80% of leading or hire charges if the insured is without their vehicle following accidental damage fire or theft
What are the two specific to commercial vehicle policies
When the vehicle is used other than in accordance with the use stipulated
When the vehicle is engaged in racing, pace making, reliability trials or speed testing
