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Motor vehicle insurance options

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What about insuring my goods when I move or putting them in storage?

Over the years the records and the annual reports of the Ombudsman's Office have consistently shown that complaints about rejections of claims under Motor Vehicle Policies take first place in the sense that there are more of them than in respect of any other type of Short-Term Insurance complaint.

This is not only because probably more people take out motor policies than any other kind of Short-Term Insurance but because such policyholders claim more often under such policies than any others and consequently are more often faced with rejections which they feel to be unjust or unfair. In an era where practically no-one buys a new vehicle for cash anymore and where the cost of a new car is often as much and sometimes more than the cost of a house which has to be financed by huge loans at high interest rates, loss of or damage to the vehicle by theft, robbery, accident, mechanical or electrical fault, is in itself a financial disaster. How much more of a disaster it is to be told by the insurance company that the claim for compensation will not be met!

Insurance policies which basically relate to damage to or loss of a motor vehicle, can broadly be classified into three classes, as follows:-

Comprehensive Cover

"Comprehensive" does not really mean what it says but a comprehensive motor policy is intended to indemnify the insured against most of the ordinary ways in which his vehicle can be lost or damaged and also against the claims of third parties for loss of or damage to their vehicles, or as a result of personal injury or death not covered by the Road Accident Fund, or loss of or damage to other people's property as a result of a motor vehicle accident.

Thus, with the usual comprehensive policy you will be covered against loss of the vehicle or damage to it, which happens as a result of an accident and you will also be covered if the vehicle is stolen or hijacked, or if anybody makes a claim against you for damage to their property as a result of a motor accident in which your vehicle is involved. Most policies will also include specifically damage to or loss of car radio and normal accessories.

Other items such as luggage, or contents of a car, may or may not be covered under the policy and if they are covered usually there is a clause which says they must be safely stored away in a cubbyhole or a locked boot.

It is important to note that in today's crime-ridden surroundings such policies nearly always contain a number of exclusions or provisions which you have to comply with before cover is granted.

For example, most vehicles have to be equipped with a particular type of immobiliser, the vehicle must be in a completely roadworthy condition and very often there are restrictions and limitations on the question as to who can drive the vehicle without affecting the insurance cover, for what purpose the vehicle is used and where the vehicle is normally used or kept.

It is also important to know what the position may be under your comprehensive policy, if there is an accident when somebody else is driving your car and not you. Remember that not anyone may be permitted to drive a motor vehicle insured under comprehensive policies.  Many insurers use the criteria of “regular driver” or “nominated driver” to determine the risk profile of a policy holder at the inception of the policy.  The identity and risk profile of the person who will drive the motor vehicle the most frequently and more than any other person is normally used as a yardstick to determine the premium payable. 

With a “nominated driver” policy only those persons specifically nominated and recorded on the policy as being permitted to drive the vehicle may in fact do so.  If you misrepresent the identity of the regular driver or fail to notify the insurer of any change in the identity of the regular driver, then you run the risk of your entire policy being declared void ab initio or the insurer rejecting liability for a claim.  Under no circumstances should a motor vehicle which will be driven by a member of your family as the regular driver be insured on the basis that you will be the regular driver of the vehicle.  This applies particularly in relation to young drivers.  An insurer will carefully investigate whether there has been any change in the identity of the regular driver as represented at inception. If that person is authorised to drive under the policy, then usually you are covered if he or she is licensed to drive and is driving with your permission, but many policies limit the number of authorised drivers, for example, to members of the family only. You must also look at your policy conditions to see to what extent any authorised driver can be regarded as an insured under the policy, for example, if the accident is the fault of that driver. Some policies do give extended cover of this kind and others do not.

Perhaps more than in the case of any other policy, the Insured has got to look at a motor comprehensive policy extremely carefully in order to see what must be done to put it into force and what he must not do to avoid the rejection of a claim.

If you can't understand any of the terms of the Policy, ask your broker or the insurer to explain them to you.

Third Party, Fire and Theft Cover

This is a less expensive policy which indemnifies you only if your vehicle is damaged or destroyed by fire or theft ( NOT as a result of a motor accident ), or if some third party alleges a claim against you as a result of your negligent driving of the vehicle.

Third Party Only Cover

The Third Party only policy, which is less expensive still, does not protect against loss or damage of the motor vehicle which you may sustain as a result of any accident or related event. It protects you basically only against claims which other people may make against you arising from the use of your motor vehicle.