This month's MOT test is aimed at brokers' knowledge of the motor trade. Answers next week
1. Insurers normally seek a separate sum insured for portable hand tools because:
a) There are usually more than one
employee's tools to be covered
b) Theft losses mean that hand tools attract a higher rate of premium
c) It is easier when settling a claim
d) They know how much they are insuring.
2. A director's personally owned car will be covered under a company motor trade road risk policy:
a) At all times
b) Only if it is being driven by the director
c) While the vehicle is in the custody or control of the company for motor trade purposes
d) When it is left in the showroom.
3. A windscreen extension to a road risks section:
a) Protects no claim discount in the event of a windscreen claim
b) Ensures all the glass in a car is covered
c) Means up to five claims can be made before an excess applies
d) Enables the policyholder to get a discount from windscreen suppliers.
4. Motor traders would insure book debts because:
a) They are then protected if someone doesn't honour payments for a car
b) In the event of loss of accounting records by an insured peril, they would be able to make good their losses
c) If a firm with whom they have an account goes out of business, they would be able to claim for any financial loss
d) Their accounting records are often not up to standard.
5. The loan or hire extension of a motor trade policy:
a) Enables firms to provide a car while
a customer's car is in the workshop for repair or service
b) A cheap way for a motor trader to insure a hire car fleet
c) Subject to the customer arranging his own insurance on the vehicle
d) Available only if the loan or hire period is less than seven days.
6. The money section of a motor trade policy will provide cover for cash:
a) Only while contained in a safe or in transit to the bank
b) Up to agreed limits while on the premises, in a safe, or in transit to the bank
c) Where there is CCTV in operation
d) When the premises are occupied.
7. If a vehicle is being driven on a trade plate:
a) The driver must be an employee
b) Anyone other than an employee may drive
c) It can be used only for private purposes
d) It must be for motor trade purposes.
8. Stock vehicles in a showroom or a display forecourt are insured:
a) By declaring them on the road risks section
b) Provided they are immobilised overnight
c) Under the all risks or material damage section
d) Provided they are taxed for road use.
9. The spouse of a director of a motor trade company who has use of a firm's car is insured:
a) When using the vehicle for private use or on company business
b) When using the car for any business use or private use
c) When travelling to or from the motor trade premises and for private use
d) When accompanied by an employee or director.
10. Under the public liability section cover is usually available:
a) To repair an engine if a mechanic forgets to put oil in during a service
b) To cover the motor trader should an accident arise as a result of negligent repair to a customer's vehicle braking system
c) If a customer's vehicle catches fire while on the premises
d) If goods are stolen from a customer's vehicle while it is in the custody of the motor trader.
11. Cover for MOT loss of licence:
a) Is only available as an extension to a full motor trade policy
b) Is available only once details of the qualifications of testers have been given to insurers
c) Is available only to firms with at least three years' experience of MOT work
d) Is based on fee income on testing.
12. Vehicles owned by the policyholder and taxed for road use:
a) Are automatically covered by the road risks section at any location
b) Must be included in material damage sum insured for own vehicles
c) Must be included in material damage sum insured if they are for sale
d) Need not be included in material damage sum insured, if removed from the premises overnight.
13. Because of fluctuating stock values on new vehicles:
a) A motor trader could arrange vehicle stock cover on a monthly declaration basis
b) The usual average condition does not apply to vehicle stock
c) Motor traders are often under-insured
d) There is a special average condition for such policies.
14. If a motor trader wishes to demonstrate a car to a prospective purchaser:
a) He can let the customer road test the car provided he covers no more than ten miles
b) He should try to ensure that a member of staff is available to accompany the customer
c) A member of staff must accompany the customer unless unaccompanied cover has been arranged
d) He should check the customer's driving licence.
15. Third party bodily injury cover under the road risks section of a combined motor trade combined policy is usually:
d) Same as third party property limit.
16. If a motor trader operates from more than one location:
a) Vehicles need only be insured at one location, as the road risks section will cover them when they are away from the first specified premises
b) Provided the vehicle sum insured is high enough to cover the maximum at risk at one site, no sum insured is required for second or subsequent premises
c) A floating sum insured for vehicle stock can be arranged over all premises
d) He should over-insure vehicle values at all premises to cover all eventualities.
17. If it is warranted that an intruder alarm with Redcare signalling must be set whenever the premises are unoccupied overnight:
a) Failure to comply with the warranty could leave the policyholder uninsured in the event of a claim
b) The motor trader should ensure that he complies with the warranty as soon as he can
c) The warranty will not apply if the police give notice that they will no longer attend the premises because the motor trader has had too many false alarms
d) The warranty will not apply if it can be proved that a loss would have arisen even if the alarm had been set.
18. A motor trader who diversifies into other non-motor trade activities:
a) Will be automatically covered as motor trade use is more hazardous than other trades
b) Should disclose the additional activities at next renewal as the premium will be adjusted for the coming year
c) Should immediately advise his broker or insurer of the change
d) Should identify the vehicles he is using for the other business and insure them separately
19. A motor trader can provide motor insurance for his immediate family:
a) Provided their vehicles have valid road fund tax and, where applicable, MOT certificates
b) Only in respect of vehicles that are owned by the policyholder
c) Provided the vehicles are owned by the policyholder or a director
d) Only for his spouse or children who have reached the age of 25.
20. The servicing indemnity extension of the public liability section of a motor trade combined policy:
a) Is designed to reimburse the motor trader if he has to repeat a repair that turns out to be faulty
b) Is to enable a mechanic to carry out repairs at the roadside
c) Will protect the motor trader in the event of an accident following negligent repair
d) Allows the garage to guarantee its repairs.
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