chapter 8 Flashcards
What status does an insurer normally hold under the Road Traffic Act (RTA) and what happens in cases where they escape RTA provisions?
A: Under normal circumstances, an insurer is considered an RTA insurer—meaning that third parties can use the Act to claim against them. In a few cases, if the insurer escapes RTA coverage (for example, due to certain policy exclusions), it then becomes obligated as an Article 75 insurer under the agreement with the Motor Insurers’ Bureau (MIB).
What is the dual indemnity undertaking in motor insurance?
A: The dual indemnity undertaking states that if a policy is issued by the direct insurer of a motor vehicle (including a ‘driving other cars’ extension), and a driver is covered under more than one policy, then the insurers will not seek contribution from the insurer that covers the driver under the other policy.
What does the Personal Effects Insurance Contribution Agreement cover?
A: It outlines when insurers must seek or share contribution for claims covering personal effects that are insured under two or more policies (such as household, motor, travel, etc.). This agreement ensures that claims for loss of personal effects are settled by the insurer against which the claim is made without requiring contributions from other insurers.
What role do motor engineers and approved repairers play in handling motor claims?
A: Insurance engineers (often experienced body repairers or estimators) assess repair costs and decide whether a vehicle is economically repairable. Insurers also form panels of approved repairers to ensure prompt, quality service, negotiate courtesy car arrangements, and control parts costs (which typically form about half of the repair bill) through the use of manufacturer price lists and negotiated discounts.
What are the key issues for electric and driverless cars from an insurance perspective?
A: Electric cars face challenges such as high repair costs due to advanced technology and battery issues (e.g., cobalt requirements and related ethical concerns). Driverless (automated) cars are subject to emerging regulation (like the Automated Vehicles Bill and consultations on ALKS) and may shift liability toward manufacturers when operating in autonomous mode, with ongoing debates on safety standards and user responsibilities.
What status does an insurer normally hold under the Road Traffic Act (RTA) and what happens in cases where they escape RTA provisions?
A: Under normal circumstances, an insurer is considered an RTA insurer—meaning that third parties can use the Act to claim against them. In a few cases, if the insurer escapes RTA coverage (for example, due to certain policy exclusions), it then becomes obligated as an Article 75 insurer under the agreement with the Motor Insurers’ Bureau (MIB).
What does the Personal Effects Insurance Contribution Agreement cover?
A: It outlines when insurers must seek or share contribution for claims covering personal effects that are insured under two or more policies (such as household, motor, travel, etc.). This agreement ensures that claims for loss of personal effects are settled by the insurer against which the claim is made without requiring contributions from other insurers.
What are the key issues for electric and driverless cars from an insurance perspective?
Electric cars face challenges such as high repair costs due to advanced technology and battery issues (e.g., cobalt requirements and related ethical concerns). Driverless (automated) cars are subject to emerging regulation (like the Automated Vehicles Bill and consultations on ALKS) and may shift liability toward manufacturers when operating in autonomous mode, with ongoing debates on safety standards and user responsibilities.
What is the current role of market agreements between insurers?
Today, formal agreements are rare due to competition law (e.g. Competition Act 1998). Instead, insurers rely on recommendations and undertakings that guide how they share or avoid claims, ensuring compliance with legal restrictions.
Why do insurers prefer non-OEM or recycled parts in repairs?
Non-proprietary parts are generally cheaper than OEM parts. Insurers use them to help reduce overall repair costs, which are a major factor in premium calculations, while still ensuring repairs meet quality standards.
How does vehicle technology such as ADAS and data sharing affect motor claims?
ADAS features (like adaptive cruise control, collision avoidance, and blind spot detection) improve road safety but increase repair costs due to complexity. Insurers and manufacturers are exploring data-sharing arrangements to streamline claims processing and repair estimation while addressing cybersecurity and privacy concerns.
Reduction in Paper Exchange (RIPE)
A method for insurers to recover accidental damage costs without needing supporting documents unless necessary
How does an insurer’s status change if it obtains a policy avoidance declaration?
If a declaration is made under section 152 of the RTA 1988 to avoid a policy, the insurer can avoid RTA liability and may reduce status to Article 75
2015 Uninsured Drivers Agreement Change
The MIB is now required to meet claims arising from the use of uncoupled trailers (runaway trailers)
Vnuk Decision (2014)
Compulsory insurance must cover accidents caused by a vehicles use, consistent with its normal function
Property Damage Time Limits
Claimants must report accidents to the police within 14 days unless the MIB reasonably requests it
What is RIDDOR in motor claims?
It requires employers to report certain work-related road accidents.
What is a Calderbank offer?
A settlement offer made “without prejudice save as to costs.”
What is the FOS compensation limit from April 2024?
£430,000 for claims after April 2019, £195,000 for older claims.
With UK insurance claims, second-hand parts are not:
a.
available in the UK, and so are not used by insurers.
b.
generally used by insurers but they would like to use pattern or spurious parts more.
c.
available in the UK currently but there are plans to increase the use of these as part of insurers’ ‘green’ policy.
d.
used by insurers and UK insurers are reluctant to use any non-proprietary parts.
b.
generally used by insurers but they would like to use pattern or spurious parts more.
What day-to-day activities is a motor engineer employed by a major UK insurer LEAST likely to get involved with?
a.
Agreeing the cost of vehicle repairs.
b.
Agreeing the standard and quality of any repair work.
c.
Liaising with customers and providing guidance to them.
d.
Establishing the market value of a damaged car.
b.
Agreeing the standard and quality of any repair work.
A jogger claims that they were hit in a country lane, by a car that did not stop. If there were no witnesses, in pursuing a claim under the Untraced Drivers’ Agreement, the claimant must demonstrate:
Question 5Select one:
a.
that they incurred an actual injury and that they did not contribute in any way to the injuries occurring.
b.
that on the balance of probabilities, the injuries suffered were as a result of the use of a motor vehicle on a road by an untraced driver.
c.
that they incurred an actual injury and that this occurred on a road.
d.
beyond reasonable doubt that the injuries suffered were as a result of the use of a motor vehicle by an untraced driver.
b.
that on the balance of probabilities, the injuries suffered were as a result of the use of a motor vehicle on a road by an untraced driver.
Paulo has been involved in a motor accident, which included damage to his own car and whiplash injuries to a third party. His insurer subsequently establishes that two previous convictions for drink driving had not been disclosed when he applied for the insurance. In these circumstances, the insurer is most likely to:
a.
avoid the policy from outset and decline any liability to either Paulo or the third party.
b.
meet the liability claim for the third party and cancel the policy from the date of the claim so as to avoid Paulo’s liabilities.
c.
avoid the policy from outset, decline any liability to Paulo but would meet the liability claim of the third party.
d.
meet the liability claims from both Paulo and the third party.
c.
avoid the policy from outset, decline any liability to Paulo but would meet the liability claim of the third party.
A car insured by Apex Insurance is stolen and involved in an accident resulting in an injury claim from a pedestrian. If it is not possible to identify the driver and there is no joint enterprise, the resultant claim would be dealt with by:
a.
An Article 75 insurer appointed under the Road Traffic Act.
b.
Apex Insurance acting as an Article 75 insurer.
c.
Apex Insurance.
d.
the Motor Insurers’ Bureau.
d.
the Motor Insurers’ Bureau.
