Motor & Commercial Vehicle Insurance

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance.

Today UK law is defined by the The Road Traffic Act 1988, which was last modified in 1991. The act requires that some motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons' property resulting from use of a vehicle on a public road or in other public places.

Insurance which satisfies the requirement of the act, for those who require cover, is called third party insurance. It is an offence to drive your car, or allow others to drive it, without at least third party insurance whilst on the public highway (or public place Section 143(1)(a) RTA 1988 as amended 1991); however, no such legislation applies on private land.

Vehicles which are exempted by the act, from the requirement to be covered, include those owned by certain: councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, health service bodies and security services.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, then the driver will usually be issued a HORT/1 (commonly known as a “producer”) with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver's choice. Failure to produce an insurance certificate is an offence.

Insurance is more expensive in Northern Ireland than in other parts of the UK.
Most motorists in the UK are required to prominently display a vehicle licence (tax disc) on their vehicle when it is kept or driven on public roads. This helps to ensure that most people have adequate insurance on their vehicles because you are required to produce an insurance certificate when you purchase the disc.
The Motor Insurers Bureau compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the Motor Insurance Database, which contains details of every insured vehicle in the country.

Coverage levels

Vehicle insurance can cover some or all of the following items:

1. The insured party
2. The insured vehicle
3. Third parties (car and people)

Different policies specify the circumstances under which each item is covered. For example, a vehicle can sometimes be insured against theft, fire damage, or accident damage independently.

Excess

An excess payment, is the fixed contribution you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the accident repair garage when you collect the car. If your car is declared to be a "write off" ("write off" is commonly used in motor insurance to describe a vehicle the worth of which is less than the economic cost of repair), the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to you.

If the accident was the other driver's fault, and this is accepted by the third party's insurer, you'll be able to reclaim your excess payment from the other person's insurance company. If the other driver is uninsured, a policy's minimum limits include coverage for the uninsured/underinsured motorist(s) at fault.

Compulsory excess

A compulsory excess is the minimum excess payment your insurer will accept on your insurance policy. Minimum excesses vary according to your vehicle, personal details, driving record and insurance company.

Voluntary excess

In order to reduce your insurance premium, you may offer to pay a higher excess than the compulsory excess demanded by your insurance company. Your voluntary excess is the extra amount over and above the compulsory excess that you agree to pay in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by your insurer, your insurer may be able to offer you a significantly lower premium.

Basis of Premium Charges

The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims. Those factors can include the car characteristics, the coverage selected (excess, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).

Gender

Men average more miles driven per year than women do, and have a proportionally higher accident involvement at all ages. Insurance companies cite women's lower accident involvement in keeping the rates lower for women drivers than men.

Age

Teenage drivers who have no driving record will have higher car insurance premiums. However young drivers are often offered discounts if they undertake further driver training on recognised courses, such as the Pass Plus scheme in the UK. Generally insurance premiums tend to become lower at the age of 25. Senior drivers are often eligible for retirement discounts reflecting lower average miles driven by this age group.

Marital Status

Drivers who are unmarried (including those in life partnerships) are often charged higher insurance premiums as opposed to married drivers.

Vehicle Classification

Owners of sports cars, muscle cars, some sport utility vehicles, and motorcycles would have higher insurance premiums as opposed to compact cars or luxury cars.

GAP Insurance

GAP coverage or GAP insurance, was established in the early 1980s to provide protection to consumers based upon buying and market trends.

Due to the sharp decline in value immediately following purchase, there is generally a period in which the amount owed on the car loan exceeds the value of the vehicle, which is called "upside-down" or negative equity. Thus, if the vehicle is damaged beyond economical repair at this point, the owner will still owe potentially thousands of pounds on the loan. The escalating price of cars, longer-term car loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a "gap" exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company. In some instances, this insurance will also pay the excess on the primary insurance policy. These policies are often offered at the motor dealers as a comparatively low cost add on that can be put into the car loan which provides coverage for the duration of the loan.

For further information or a quotation call Quadris Insurance Brokers on:
0208 144 1271 or email us insure@quadrisinsurance.co.uk