Continuing the series on third party motor insurance, Roy Rodger explains some of the exclusions policies contain

Consider this section in third party policies:

"Property belonging to or in the custody or control of the person claiming indemnity under this section."

Think of this as covering the driver for claims made against him in respect of damage or injury he has caused. Obviously, he cannot claim against himself and consequently, if he runs into his own gatepost, he cannot sue himself.

On the other hand, if a named driver runs into the policyholder's gatepost, the policyholder would expect the driver to pay and the policy would cover the damage, that is the driver's liability.

"Loss of, or damage to, any vehicle being used or driven under this section of the policy."

This makes clear that, if damage to the car is to be covered, the policyholder needs to have comprehensive cover. Also, it removes any doubt that damage to a car being driven as a DOC (Driving Other Cars) car should be regarded as third party property under this section. The DOC car cover is third party only.

"Anyone entitled to cover under another policy."

This is self-explanatory and in cases where both policies contain a similar exclusion, it is up to the insurers to share the claim.

An exception to this would be where a permitted driver was also covered under his own policy's DOC extension. In these cases, the insurer covering the car pays the claim.

"Liability for death or injury to any person arising out of their employment by the person claiming indemnity under the policy except as required by road traffic legislation."

Confused? I don't blame you. What does it mean?

From the beginning of compulsory motor insurance, it was never compulsory to insure against injuries to employees where the injury occurred out of, and in the course of, their employment by the policyholder.

This was regarded as being adequately catered for by employers' liability (EL) insurance, even in the days before EL was compulsory, and all motor policies contained the appropriate exclusion.

A problem arose, however ,with European Union legislation. As far as the EU is concerned, all passengers in a motor vehicle have to be protected by a motor policy, and no other (Third EC Motor Insurance Directive).

As a result, UK insurers had to widen their cover to include claims by passengers where the passenger was being carried in the course of his job. As a result of this, the italicised words were added to the exclusion.

What it means is, prior to the change, if a driver's mate in a furniture lorry was injured while being carried as a passenger, his claim would be dealt with as an EL claim, but now it is dealt with as a motor claim.

If the same man was injured, not as a passenger, but while unloading the lorry, or while changing a wheel, his claim would still be dealt with as an EL claim because the change imposed by the EU referred only to passengers.

The original legislation passed on the back of the EU Directive was drafted in such a way that "passenger" could be interpreted to include the driver.

This was a most unsatisfactory situation for UK insurers. They envisaged having to pay claims to drivers for back pains and other ailments associated with excessive driving.

However, after much lobbying and expense, a judicial review confirmed that the driver was not a "passenger" in the terms of the Third Directive. This meant that claims from drivers for the ailments mentioned above would continue to be directed at EL insurers.

"If under the law of any country we have to make a payment which we would not otherwise have paid, we can ask you to pay us this amount."

While this is not an exclusion, it is appropriate to deal with it here.

Some of these provisions result in the `insurer' of the driver making a payment to the victim and where this occurs, the `insurer' is entitled to recover from the driver. This makes the position clear to the policyholder.

In these cases, the company acts more as a banker than as an insurer, and the words "insure'' and "indemnify" are not strictly correct in this context.

Question 1
A driver, garaging his car at home, damages a lawnmower in the garage:

A The damage is insured under the motor policy

B The damage is not insured under the motor policy, but if the driver has a household policy it may be covered under that

C The risk cannot be insured.

Question 2
A car being driven under the DOC section of the policy is insured as follows:

A For the same cover as the car on the policy

B Road Traffic Act only

C Third party only

D Comprehensive.

Question 3
The driver's mate is assisting him reverse the vehicle and is accidentally run over. What policy would provide the compensation?

A The motor policy

B The employer's group personal accident policy

C The employers' liability policy

D The employer's public liability policy.

Question 4
The same example as above, but the mate is riding in the cab when the lorry is in a collision with another vehicle.

A The motor policy

B The employer's group personal accident policy

C The employers' liability policy

D The employer's public liability policy

Question 5
Where an insurer is obliged by the Road Traffic Act to pay compensation to a victim under an invalid policy. What course of action is available to him?

A File his papers

B Apply to the Motor Insurance Bureau for reimbursement

C Attempt recovery from the driver

D Ask for a contribution from the government.

This CPD is one of a series provided by Roy Rodger FCII of Roy Rodger Motor Insurance Training & Consultancy. Roy can be contacted at , or on 0151 632 5914.

The CPD page is edited by RW Associates, specialists in training, competence and compliance. Email .

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