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Understanding your Motor Insurance Policy


Here are the most common questions I’m asked about Motor Insurance Policies:

What is a Comprehensive Policy?
A ’Comprehensive’ policy, very simply, covers your legal liability for death or injury to other persons or for damage to their property, as well as loss or damage to your vehicle. There are two significant sections under the policy; one covers your Third Party liability and the other covers damage to your vehicle.

Who or what is the Third Party?
The Insurance Company is termed the First party, you are the Second Party and any other person who becomes the subject of a claim becomes a Third Party. So if you drive your vehicle into the rear of another person’s car. The owner of that vehicle or any injured passengers in it, are considered Third Parties in the eyes of the law.

What is the minimum cover required to operate my vehicle on a public road?
Under the Road Traffic Act you need to have third party insurance to the limits required by the Act. Most Insurance Policies exceed these limits within their standard cover.

Can anyone drive my car?
That depends on the limitations of the cover you have arranged. All policies require the driver to be legally licensed to drive the vehicle. Apart from that requirement however, your policy may cover any licensed driver or it may be restricted to the named drivers you have declared to your Insurance company or Agent. Some companies may attempt to restrict cover to persons within a certain age band. This is illegal under the Ordinance as far as third party cover is concerned although there are circumstances where the insurance company can force you to reimburse their costs, but the restriction is legal as regards the damage to your vehicle if the driver is outside the permitted age band. Never ever allow your vehicle to be driven by an underage driver without declaring that driver to your insurance company.

Will my policy cover me driving other vehicles?
Most policies will provide third party cover only while you are driving a vehicle not owned by you or hired to you under a Hire Purchase Agreement. Be aware however that your policy will certainly not cover damage to the vehicle you are driving.

Is there a period of grace following the expiry of my insurance policy to give me time to renew the policy?
Normally not even a minute.

Do I have any automatic cover for any new vehicle that I purchase?
Not usually; you have to arrange cover on the new vehicle before you take it on the road.

Will I be covered for the cost of a rental car while my vehicle is off the road following an accident?
Insurance policies do not normally cover loss of use; you have a legal right to claim reasonable loss of use from the third party driver who caused the accident or from their insurers.

If my vehicle is ‘written off’ by my insurance company, will I be paid the sum insured under my policy?
Not necessarily; your insurance policy will offer you the market value of your vehicle or the sum insured- whichever is the lower. To calculate the market value, insurance companies usually determine the retail cost of your vehicle in the U.S.A. from the Blue Book, NADA Guide or Black Book and then add freight and duty to arrive at the landed cost. They may reduce that value to take the condition of the vehicle into consideration or to adjust for local road conditions.

If my Insurance runs out without my knowing and I am stopped by the police, can I ask my Insurance Company to back date my cover note?
No, it is illegal to back date cover notes.

These are some of the facts that every Motorist should know about their policy. Unfortunately these facts all too often only become apparent at the time that a claim is being made.
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