IF5 questions

Question 1

To whom might join a joint private motor policy be issued?

Answer 1

A husband a wife

Question 2

Who can Lloyd’s motor syndicates accept business from?

Answer 2

They can accept business from brokers authorised by Lloyd’s, accept business from other intermediaries as long as the broker guarantees payment of premium.

Question 3

In which two areas would an insurer expect to reduce costs by establishing a direct selling operation?

Answer 3

Reduced handling costs and broker commissions.

Question 4

What is the purpose of the motor insurers database

Answer 4

Reduce the amount of uninsured vehicles on the road in the UK. Also to meet the purpose of the fourth Eu directive, this means every member must maintain a central database which can provide details of the insurer of every vehicle on the road. Making it easier for EU citizens to claim outside their own country

Question 5

What is an insurance write-off and why does information about this need to be passed to the DVLA?

Answer 5

Occurs when the cost of the repair is greater than the vehicle. The insurer passes details to the DVLA which allows the DVLA to control the registration of vehicles that might not be roadworthy.

Question 6

Do unspecified trailers have to be in the vicinity of the towing vehicle for the same cover as the vehicle to be in place?

Answer 6

Cover will be the same, however if it detached then it should remain close to the vehicle

Question 7

List five exclusions that normally appear in a motor policy

Answer 7

Loss of use, depreciation, wear and tear, mechanical or electrical breakdown, damage to tyres, reduction in market value

Question 8

How is breakage of glass treated?

Answer 8

Insurers will pay for the cost of replacements windscreen or windows from any cause. Also including the coat of any bodywork damage costs. However there may be some excess applicable. However there may also be a limit to how much the insurers pay out.

Question 9

List three ways in which loss, theft or damage to car accessories and spare parts will be dealt with by an insurer

Answer 9

Repair the damage, replace what is lost or damaged beyond repair, pay in cash the amount of loss or damage

Question 10

What is market value?

Answer 10

The amount it would cost to replace a vehicle with a vehicle of a similar make, model, condition and mileage.

Question 11

Under part V of the road traffic act, what can only those on the register of approved instructors do in return for payment?

Answer 11

Provide driving tuition.

Question 12

How is road defined in s. 1921 of the 1988 road traffic act?

Answer 12

Any highway and other road to which the public has access and includes bridges over which a road passes

Question 13

What is the main effect of the road traffic act 1999

Answer 13

Any person who accumulates six points on their license within two years of passing the drivers test automatically has their license revoked and they will need to apply for a provisional license again. This means that they will need to take a further driving test before they can drive unaccompanied.

Question 14

Section 143 of the 1988 act sets out the offences of driving without insurance and permitting driving without insurance. What would be the position of an employee if their employers vehicle was not insured?

Answer 14

Employee would escape prosecution if they were driving their employers vehicle and did not know or had no reason to believe that there was no insurance.

Question 15

What alternative to third party insurance does the road traffic act 1988 allow?

Answer 15

Any person can deposit as security and sum of money with the accountant general as an alternative to insurance. Although this option is for everybody, in practice, only very large companies use it.

Question 16

What conditions need to be met in order that a driver may accept a contribution towards the running costs of a vehicle under a car sharing arrangements?

Answer 16

In order to accept a contribution:

Vehicle must not be capable of carrying more than eight passengers and it must not be a motorcycle.

The fare paid or the aggregate fares paid by the passengers.

The amount of fare must be agreed before the commencement of the journey.

Question 17

Why are green cards still widely issued by UK insurers

Answer 17

Provide minimum cover when travelling abroad for UK citizens. The green card therefore confirms the equivalent cover.

Question 18

Who is a consumer as described in the consumer insurance act 2012?

Answer 18

Individual who enters into the contract wholly or mainly for purposes unrelated to the individuals trade, business or profession.

Question 19

List six of the parts which will normally be contained in a policy schedule.

Answer 19

The preamble, definitions, loss or damage, liability to others, foreign use, additional benefits, general expectations, service info, schedule.

Question 20

f a vehicle Is unroadworthy then insurers have the right to repudiate the claim entirely, but what are the only circumstances in which they would do this?

Answer 20

If the unroadworthy condition contribution to an accident or loss.

Question 21

What are the main functions of a temporary cover note?

Answer 21

Provide the policyholder with the main details of the cover granted whilst the permanent documents, including the policy, itself, is prepared.

Question 22

What is the purpose of the notification condition in a policy?

Answer 22

Notifies the insurer of any incidents that could lead to a claim. They must also forward any correspondence they receive in connection with an incident without replying and also let the insurer know of any hearing, that they become aware of, such as a prosecution or inquest. Therefore the insurer can protect its position.

Question 23

Why is pollution excluded for motor policies unless it is caused by a single identifiable incident?

Answer 23

Often pollution occurs gradually and it may be a number of years before its consequences come to light. Such as a long tail risk is not suitable for motor insurance.

Question 24

What are the usual main rating factors for good carrying vehicles?

Answer 24

Use, district, type/size or vehicle, policy cover, drivers.

Question 25

List five areas in which an insurer may need to ask questions in respect of the proposer and any other drivers for private motor insurance.

Answer 25

Who the main user is, occupation, license details, accident and loss history, any conviction history, disability of drivers, sex, country of origin.

Question 26

What is the man purpose of a no claims discount?

Answer 26

Reward granted by policyholders, who have not made a claim upon their policy. Was introduced to increase loyalty.

Question 27

When renewing a policy, what features might the insurer need to give special attention to?

Answer 27

Risk may have changed since last renewal, may have convictions in last year, may be high claims freq or high claims value.

Question 28

Why is the area in which a car is used or garaged an important factor in motor insurance rating?

Answer 28

Areas of heavy population may cause more collisions, theft also varies depending on where the area is.

Question 29

What is the role of the claims department?

Answer 29

Indemnify the policy holder, ensure only valid claims are paid, provide and fair and fast claims service, deal with 3rd party claims, protect the fund of premiums against overpayment

Question 30

What does without prejudice mean?

Answer 30

This means that anything written and marked without prejudice cannot be produced as evidence in legal proceedings.

Question 31

What is the maximum award which can be made the Financial Ombudsman?

Answer 31

£150,000

Question 32

What is the insurers position in the case of a fraudulent claim?

Answer 32

Must refuse indemnity for that claim, treat the policy as if it did not exist for the future and request reimbursement of any claims already paid.