if5 test 2

Question 1

For which of these would specialised underwriting be required when considering motor cycle insurance?

a. Riders aged between 30 – 40 years of age
b. Riders owning more than one motor cycle
c. First time motor cycle owners
d. Despatch riders

Answer 1

d. Despatch riders

Question 2

Which of these is a particular competitive advantage of an online insurance provider over a high street broker when arranging commercial motor insurance?

a. Offering a personalised service to customers
b. Handling the administrative tasks associated with commercial motor insurance risks
c. Providing enhanced and bespoke additional services
d. Offering a choice of quotes from different insurers for the same risk

Answer 2

d. Offering a choice of quotes from different insurers for the same risk

Question 3

“It is the designated information centre in the UK, as created by the EU Fourth Motor Insurance Directive.” What is being described here?

a. The Association of British Insurers
b. UK Information Centre
c. The Motor Insurance Database
d. The Motor Insurer’s Bureau

Answer 3

a. The Association of British Insurers

Question 4

Which of these accurately defines an insurance “write off” in motor insurance policy terms?

a. The cost of repairs is greater than the value of the vehicle
b. The nature of the repairs required to restore the vehicle to safe use are not practicable
c. The cost of a replacement vehicle is less than the cost of required repairs
d. The vehicle has either been missing and unrecovered for a period in excess of sixty days or is beyond economic repair

Answer 4

b. The nature of the repairs required to restore the vehicle to safe use are not practicable

Question 5

An insurance intermediary produces a set of literature and documents to promote and sell a motor insurance product. Which of these describes the obligations on the intermediary as created by ICOBS 2 (General Matters)?

a. The intermediary must allow customers sufficient time to consider the content of the literature and documents before concluding a sale
b. The promotional documents must contain a full demands and needs statement
c. The literature and documents must be clear, fair and not misleading
d. The promotional literature must set out adequate pre-contract information

Answer 5

a. The intermediary must allow customers sufficient time to consider the content of the literature and documents before concluding a sale

Question 6

Which of these correctly differentiates Road Traffic Act (RTA) cover from third party only (TPO) cover?

a. A TPO policy will provide for all legal costs, irrespective of the type of vehicle covered whilst an RTA policy will provide defence costs only
b. TPO cover extends beyond RTA cover to provide for liability in any situation involving a motor vehicle
c. TPO extends beyond RTA cover to provide emergency treatment payments
d. RTA cover will provide protection to the estate of anyone indemnified under the policy whilst TPO will not

Answer 6

c. TPO extends beyond RTA cover to provide emergency treatment payments

Question 7

Which of these is the correct legal description of “theft”?

a. Removal by violent, forcible and visible means
b. Taking without consent
c. The intention of permanently depriving
d. Unlawful removal without intention to restore

Answer 7

b. Taking without consent

Question 8

Whilst driving, Trevor’s vehicle has a serious mechanical failure. He escapes collision with any other vehicle, however, the engine seizes and there is a fire which causes damage to the front interior. Trevor submits a claim under his comprehensive motor policy for repairs to his car engine and the front interior. What part of his claim will be covered, if at all?

a. All elements of the claim will be covered
b. There will be no cover for the damage caused as a result of the mechanical failure, however, repairs to the engine are likely to be covered
c. There will be no cover for repairs to the engine, however, the damage caused as a result of the fire is likely to be covered
d. There is no cover for the circumstances and so Trevor’s claim will be declined

Answer 8

c. There will be no cover for repairs to the engine, however, the damage caused as a result of the fire is likely to be covered

Question 9

What is the usual basis of premium calculation for a motor cycle insurance policy issued on a specified motorcycle basis?

a. The lowest calculated, based on the age of the oldest rider
b. The highest calculated, based on the age of the youngest rider
c. The average calculated, based on the ages of the riders
d. The average age of the riders and the cc of the motor cycle

Answer 9

c. The average calculated, based on the ages of the riders

Question 10

What is the primary reason for the loading / unloading exclusion in a commercial vehicle policy?

a. The potential operation of two different policies – a motor policy or a public liability policy
b. The potential for extremely high claims frequency and value in this area
c. The concern of insurers for the propensity of carriers to mishandle goods or take inadequate care during the loading and unloading of property
d. The difficulty with distinguishing ownership of goods in loading and unloading situations

Answer 10

a. The potential operation of two different policies – a motor policy or a public liability policy

Question 11

To what extent is cover available under a motorcycle policy for pillion or sidecar passengers?

a. Third party liability for damage to the property of pillion or sidecar passengers
b. Third party liability for property damage and injury but only for sidecar passengers
c. Third party liability for death of or injury to pillion or sidecar passengers
d. There is no cover in respect of pillion or sidecar passengers

Answer 11

c. Third party liability for death of or injury to pillion or sidecar passengers

Question 12

Which of these is a stipulation of a standard legal expenses policy?

a. There must be a high prospect of recovering 80 – 100% of the uninsured loss in order for cover to apply
b. The insurers will only support an action for private motor insurance policyholders
c. The insurers will only support an action if the policyholder has had no previous liability claims against them
d. The insurers will require control over the choice of lawyer

Answer 12

d. The insurers will require control over the choice of lawyer

Question 13

What does Part III of the Road Traffic Act 1988 relate to?

a. Construction and use of vehicles and equipment
b. Licensing of drivers of vehicles
c. Principal road safety provisions
d. Driving instruction

Answer 13

b. Licensing of drivers of vehicles

Question 14

What is the correct definition of a motor vehicle within the terms of the Road Traffic Act of 1988?

a. A mechanically, electrically or steam propelled vehicle for use on the public highway
b. A vehicle that is capable of being mechanically propelled and is intended for use on the highway
c. A mechanically propelled vehicle intended or adapted for use on roads
d. A mechanically propelled vehicle

Answer 14

c. A mechanically propelled vehicle intended or adapted for use on roads

Question 15

Which of these is an allowable alternative to compulsory motor insurance, as set out by section 144 of Part VI of the Road Traffic Act of 1988?

a. Any person who deposits a stated sum of money with the Accountant General
b. Any person who can meet the basic principle of making adequate provision to protect innocent victims
c. A company with its own captive insurer
d. The owner of a motor vehicle which is temporarily incapable of being propelled

Answer 15

a. Any person who deposits a stated sum of money with the Accountant General

Question 16

Which 2015 Act simplified the processes relating to the issue and surrender of certificates of insurance?

a. The Insurance Act
b. The Deregulation Act
c. The Road Traffic Act
d. The Consumer Rights Act

Answer 16

b. The Deregulation Act

Question 17

Which of these scenarios is allowable by Section 150 of Part VI of the Road Traffic Act of 1988 which deals with car sharing?

a. Jasmine gives Nabil a lift to work on the back of her motorcycle, for which he pays her the equivalent of his bus fare
b. Jody collects Ben on her way to the fortnightly school governors’ meeting and they agree the costs on an “as and when” basis when they arrive
c. Feon and Janice collect their neighbours in their 10-seater crew bus to attend the local town football matches
d. Sally and Jake have agreed that she will pay him a small proportion of his fuel costs each time he gives her a lift to work in his two-seater sports car

Answer 17

d. Sally and Jake have agreed that she will pay him a small proportion of his fuel costs each time he gives her a lift to work in his two-seater sports car

Question 18

With what are Sections 157 and 158 of Part VI of the Road Traffic Act of 1988 concerned, where an accident has taken place causing injury?

a. Avoidance of certain agreements as to liability towards passengers
b. Requirements in respect of policies of insurance
c. Payment for hospital treatment and of emergency treatment of traffic casualties
d. The duty to give information as to insurance

Answer 18

c. Payment for hospital treatment and of emergency treatment of traffic casualties

Question 19

What action, if any, is open to an injured third party if there is no insurer to pick up a court judgement for an award for damages?

a. They are limited in their options and unlikely to be able to achieve a settlement
b. They may make a request to the Victim Compensation Scheme
c. They may apply for legal aid if they can show they have a private case against the negligent party
d. They are entitled to take their claim to the Motor Insurers’ Bureau

Answer 19

d. They are entitled to take their claim to the Motor Insurers’ Bureau

Question 20

Which body represents the UK on the Council of Bureaux?

a. The Association of British Insurers
b. The Financial Services Authority
c. HM Treasury
d. The Motor Insurers’ Bureau

Answer 20

d. The Motor Insurers’ Bureau

Question 21

What was the effect of the Fifth Motor Insurance Directive on the injury third party liability cover limit?

a. It re-structured the limit to apply to both injury and property
b. It increased the limit from Euro 350,000 to Euro 500,000 per victim
c. It increased the limit from Euro 350,000 to Euro 1 million per victim
d. It increased the limit to a maximum of Euro 5 million per victim

Answer 21

c. It increased the limit from Euro 350,000 to Euro 1 million per victim

Question 22

Which of these accurately describes the function of the Green Card?

a. It provides evidence that the holder has the minimum insurance cover required by law in the country visited
b. It supplements the European motorist’s standard motor insurance policy when they travel outside their home country and within the EU
c. It provides the holder with the minimum insurance cover required by law in the country visited
d. It provides evidence that the holder has the minimum insurance cover required by law in their country of origin

Answer 22

a. It provides evidence that the holder has the minimum insurance cover required by law in the country visited

Question 23

At what point does the period of rehabilitation commence, within the terms of the Rehabilitation of Offenders Act 1974?

a. At the date of conviction
b. At the date the penalty expires (for example, fixed points, imprisonment)
c. At the date of the offence
d. At the first anniversary of the conviction date

Answer 23

a. At the date of conviction

Question 24

Fiona made a full and accurate disclosure about her ‘protected characteristic’ to the DVLA and was granted a license. What effect, if any, will this have on her motor insurance?

a. Fiona will be required to take a comprehensive policy
b. Fiona will not be permitted to take a comprehensive policy
c. None, the insurer will generally quote at more or less the same rate
d. The insurer will either charge a much higher premium or place exclusions on the policy

Answer 24

c. None, the insurer will generally quote at more or less the same rate

Question 25

What provision, if any, do employers’ liability policies make in respect of liability incurred under the Road Traffic Act (RTA)?

a. Most will include a warranty that RTA liabilities are covered fully elsewhere
b. The majority exclude RTA liability
c. The majority extend to include RTA liabilities
d. A small minority exclude RTA liability

Answer 25

b. The majority exclude RTA liability

Question 26

Which of these documents is specifically required by the Road Traffic Act to effect the cover under a motor insurance contract?

a. A policy schedule
b. A policy document
c. A premium receipt
d. A certificate of insurance

Answer 26

d. A certificate of insurance

Question 27

What provision has to be met in order for the commencement date on a motor insurance certificate to be shown as the legal commencement date of the cover?

a. The cover note has to be issued to and received by the policyholder within ten days of the commencement date on the temporary certificate
b. A temporary certificate of insurance has to be issued within the currency of the cover note
c. A permanent certificate of insurance has to be issued within the currency of the cover note
d. The premium has to be paid and received within the currency of the cover note

Answer 27

c. A permanent certificate of insurance has to be issued within the currency of the cover note

Question 28

Why do motor insurers wish to know where a vehicle is usually kept – whether in a garage, on a drive way or on a road?

a. This information enables them to determine whether or not they will issue comprehensive cover
b. This information assists them with their rating
c. This information indicates to the insurers the policyholder’s attitude to risk
d. This information is a requirement of the Road Traffic Act

Answer 28

b. This information assists them with their rating

Question 29

When proposing for cover, a customer indicates that a number of family members wish to be insured for driving the vehicle to be insured. Which of these will the insurers wish to establish in relation to this specific point on driver details?

a. The main user of the vehicle
b. The type of vehicle and whether it has been modified
c. The usual place in which the vehicle is kept
d. That none of the named drivers has any other motor vehicle cover

Answer 29

a. The main user of the vehicle

Question 30

Jason has a fully comprehensive motor insurance policy in his sole name for his car. Benny, his friend, borrows Jason’s car one afternoon without permission to collect his mother from the airport. When in the airport car park, Benny collides with a bollard and causes damage to the bumper of Jason’s car. What is the position under a standard motor insurance policy in these circumstances?

a. No cover is available because Benny has caused the damage off a public road and in a car park
b. Jason may obtain cover under the third party liability section of his comprehensive policy for the costs of repairing the damaged bumper
c. Full cover is available provided that Benny can prove he has a valid driving license
d. No cover is available as the policy excludes damage arising when the vehicle is being driven by a person not permitted to do so by the certificate of motor insurance

Answer 30

d. No cover is available as the policy excludes damage arising when the vehicle is being driven by a person not permitted to do so by the certificate of motor insurance

Question 31

Following a minor prang at a junction, Cilla gets out of her car to apologise to Jake for losing concentration and to offer to pay for the damage she believes she has caused. Why might her motor insurers take a dim view of Cilla’s actions?

a. She has contributed to an increase in the value of any claim that Jake can bring against her
b. She may have weakened her insurers’ position with regards to any third party claim in her admission of fault
c. She may have endangered her own safety by leaving the vehicle and approaching Jake for a discussion
d. She has interfered with the standard motor insurance procedure of “knock for knock”

Answer 31

b. She may have weakened her insurers’ position with regards to any third party claim in her admission of fault

Question 32

What action must a policyholder take when cancelling their motor insurance policy?

a. Confirm cancellation in writing to the insurers and return to them the certificate of motor insurance
b. Notify the insurers of the intention to cancel and seek written acknowledgement from them
c. Acquire a ‘consent and indemnity’ form from the insurers, sign it and return it
d. Contact the insurers, cancel any direct debit or other payment arrangement, and submit a formal request for refund of any unused premium

Answer 32

a. Confirm cancellation in writing to the insurers and return to them the certificate of motor insurance

Question 33

Which of these conditions applicable to a commercial vehicle policy is of particular importance when considering the use of the Motor Insurance Database?

a. The roadworthy condition clause
b. The change of or additional vehicle condition
c. The limit of indemnity exceeded condition
d. The service information provisions

Answer 33

b. The change of or additional vehicle condition

Question 34

Which Act set out to increase the level of fairness to consumers by relieving them of the duty of utmost good faith?

a. The Consumer Rights Act 2015
b. The Insurance Act 2015
c. The Consumer Insurance (Disclosure and Representations) Act 2012
d. The Contracts (Rights of Third Parties) Act 1999

Answer 34

. The Consumer Insurance (Disclosure and Representations) Act 2012

Question 35

When an advisory rating is given by a Group Rating Panel (GRP), what is not taken into account?

a. The cost of repairs
b. The vehicle’s security
c. The vehicle’s age
d. The vehicle’s performance

Answer 35

. The vehicle’s age

Question 36

How are fleets usually classified by commercial motor insurers?

a. Standard and sub-standard
b. Industrial, service and agricultural
c. Light, passenger and freight
d. Small, medium and large

Answer 36

d. Small, medium and large

Question 37

Which of these can be prejudiced by the application of a no claim discount?

a. Those with a good driving record under another driver’s policy
b. Those with an historical NCD
c. Those with a poor driving record
d. Those with a high value vehicle

Answer 37

a. Those with a good driving record under another driver’s policy

Question 38

What are the most common circumstances for the issue of an agreed value motor policy?

a. Where the insured driver is over 65 years of age
b. Where the policyholder has a poor claims experience
c. Where the insured vehicle is a vintage or classic car
d. Where the insured vehicle is used for commercial purposes

Answer 38

c. Where the insured vehicle is a vintage or classic car

Question 39

Of what are professional entertainers, armed forces employees and betting shop proprietors all examples in the context of motor insurance?

a. Occupations deemed undesirable by motor insurers
b. Occupations which make a motor insurance risk attractive
c. Occupations for which there is no possible motor insurance option
d. Occupations which traditionally produce positive claims experience for motor insurers

Answer 39

a. Occupations deemed undesirable by motor insurers

Question 40

For which of these reasons might a commercial motor insurer consider a school bus as a less risky proposition than a motorway express coach?

a. Delivery of passengers is not time critical on a school bus whilst it is on a motorway express coach
b. School bus passengers are non-ticketed and therefore, easier to trace
c. Drivers of school buses are required to obtain a higher level of driving qualification than drivers of motorway express coaches
d. The interruption to school bus services as a result of an accident is less severe than to a motorway express service

Answer 40

a. Delivery of passengers is not time critical on a school bus whilst it is on a motorway express coach

Question 41

Which of these increases the importance of renewal retention for commercial insurers?

a. The relatively inexpensive administration associated with renewal
b. The heavy administration burden of renewal
c. The occurrence of poor claims profiles
d. The installation of automated systems for policy administration

Answer 41

b. The heavy administration burden of renewal

Question 42

What is the basis on which most sections of cover under a motor insurance policy are provided?

a. Reimbursement
b. Indemnity
c. Compensatory
d. Betterment

Answer 42

b. Indemnity

Question 43

Which of these types of motor car is particularly prone to claims for fire?

a. Old cars
b. High value cars
c. Hire or reward cars
d. Imported cars

Answer 43

a. Old cars

Question 44

What are the two key issues with any third party claim?

a. Fault and fact
b. Negligence and indemnity
c. Responsibilities and relationships
d. Liability and quantum

Answer 44

d. Liability and quantum

Question 45

Which of these will be useful to a motor claims handler who suspects a fraudulent claim?

a. ABI
b. FOS
c. CUE
d. FSCS

Answer 45

c. CUE

Question 46

Which of these is an accurate interpretation of the current law in relation to contributory negligence?

a. A claim for personal injury damages will not be reduced by the establishment of contributory negligence on the part of the claimant
b. A claim for damages must be commensurate with the extent of a person’s responsibility
c. The amount of a reduction in damages will be commensurate with the extent of a person’s responsibility
d. A person’s entitlement to damages will be significantly reduced where there is evidence of contributory negligence

Answer 46

c. The amount of a reduction in damages will be commensurate with the extent of a person’s responsibility

Question 47

What are the implications of a piece of correspondence issued by a motor insurer being marked “without prejudice”?

a. It limits the undertaking of negotiations between the parties involved
b. It may be construed as a partial admission of liability
c. It demonstrates to the policyholder a lack of willingness by the insurer to engage in the process of negotiation
d. It may not be produced as evidence in legal proceedings

Answer 47

d. It may not be produced as evidence in legal proceedings

Question 48

What types of loss are recorded on the Motor Insurance Anti-Fraud and Theft Register?

a. Losses which exceed £1,000

d. It may not be produced as evidence in legal proceedings
c. Theft losses

d. Insured losses

Answer 48

B It may not be produced as evidence in legal proceedings

Question 49

What is the purpose of the confidential telephone line run by the IFB?

a. It provides policyholders with advice and guidance on motor legal issues
b. It allows people to report suspected insurance frauds
c. It provides consumers with support in the event of a dispute with their insurer
d. It is used for the collection and registration of motorist data

Answer 49

B It allows people to report suspected insurance frauds