1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144 
INSURANCE PROBLEMS ELUCIDATED
Page 49
If you've noticed an error in this article please click here to report it so we can fix it.
A Clear Explanation of Various Points on Insurance which Have Received Publicity During the Past Few Months
By a Legal Adviser
MANY difficult points have arisen in connection with the interpretation and application of the provisions of the Road Traffic Act with regard to third-party insurance; these have led to a number of cases in which drivers have been convicted and their licences have been suspended owing to alleged breaches of the requirements of the Act. The wording of the Act is extremely complicated, but the provisions as to third-party insurance may be summarized by stating that it is an offence to use, or to allow to be used, a motor vehicle unless there be in force a policy of insurance which covers the owner and the driver against legal liability for any injury to any other person-.
It is not necessary that the policy should cover liability in respect of an injury which arises out of, and in the course of, the employment of the injured person. No doubt this exception was inserted in the Act because such a person already has his remedy under the Workmen's Compensation Acts. It is also not necessary, except in the case of a vehicle in which passengers are carried for hire or reward, that the policy should cover liability to persons who are carried in the vehicle.
It appears that in most, if not all, of the cases which have occurred there was a policy under which the owner and driver believed they were insured, because the owner, or driver, had taken out a third-party policy. Why, then, were the convictions recorded and the licences suspended?
The Policy Not in Force.
The answer to the question appears to be that although the owner, or driver, may have taken out a policy and paid the premium, the policy was not in force at the time when the accident happened, because something had been done which was not permitted under the terms of the policy, and which allowed the Insurance company to repudiate liability thereunder, or, at any rate, would have been good ground for such repudiation if the person insured had sued the company for failing to meet its obligations under the policy.
When considering the extent to which any insurance policy covers the person insured, it is not sufficient to read merely the provisions of the policy itself, Including the conditions which are stated upon iti but it is also necessary to bear in mind the questions which were asked in the proposal form at the time when the policy was effected and the answers given to those questions.
If the words at the end of the proposal form be read carefully it will, as a rule, be found they provide that the person applying for the policy warrants the accuracy of the answers to the questions and agrees that those answers shall form the basis of, and be incorporated in the policy.
For example, one of the questions asked may have been whether the vehicle would be used with or without a trailer, and the answer may have been that it would not be used with a trailer. In such a case, if at any time the vehicle be used with a trailer and an accident occurs while it is being thus used, the insurance com
pany is entitled to repudiate liability for injuries arising out of that accident, even though nothing was said in the policy itself to the effect that the vehicle should not be used with a trailer.
Other cases-occur in which insurance companies are in a position to repudiate liability owing to the fact that the vehicle was being used at the time of the accident for a purpose which was inconsistent with the information given in the proposal form, or which was inconsistent with the express terms of the policy itself.
For example, if it has been stated in the proposal form that the vehicle will be used only for carrying goods, the insured will not be covered while it is being used for the conveyance of passengers. If in the proposal form it was stated that the vehicle would be used only in the charge of a driver and mate, the policy would not be effective while the vehicle was being controlled by a driver without a mate.
If the vehicle was insured for use on only local journeys the company could repudiate liability for an accident which occurred on a long-distance run, whilst if the vehicle insured be a motorcycle which was insured as a solo machine, the rider would not be covered when using the machine with a pillion passenger.
"Comprehensive" Apt to be Misleading.
There is no doubt but that some owners and drivers are misled by the use of the term "comprehensive," which is applied to certain policies covering a number of risks, such as fire, theft, accident and third-party claims. It must be remembered that, whether a policy be called a "comprehensive policy" or an "alt-risks policy" or by any other name, it covers the insured only so long as the vehicle is used in accordance with the specified terms and with the answers given in the proposal form.
Another point, the importance of which cannot be stressed too strongly, is that it is essential that the greatest care be taken by an owner, when filling in the answers to a proposal form, to be sure that the answers are strictly accurate in all respects and particularly in regard to previous insurances effected in respect of the vehicle being insured and previous accidents and claims which have been made in respect thereof.
It is most important that the owner of the vehicle should be sure that any material information affecting the answers to the questions is given to the insurance company itself, as it is not safe to trust to the fact that the information has been given to an agent of the company. In a number of cases where information as to previous claims has been given to the agent, it has been held that for the purpose of filling in the proposal form the agent was the agent of the insured and not of the company, although for other purposes he may be the agent of the insurer.
Where there is any doubt on this point the owner of the vehicle who is applying for the policy should send full details to the insurance company and keep a copy of his letter, so that it may be available for future reference. if necessary.