'ost-guarantee isurance
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from a special correspondent
• It is now possible to ensure against the cost of replacing defective parts in a vehicle after the expiry of a manufacturer's guarantee. The insurance, underwritten at Lloyd's by arrangement through Sir William Garthwaite (Insurance) Ltd., should be arranged at the time a new vehicle is bought, even though it does not take effect until after the expiry of the manufacturer's guarantee.
For a premium calculated at a rate of £2 per cent on the purchase price of the vehicle, including accessories, underwriters will cover the cost of replacing any part or parts which may become defective. In addition, they will pay for the cost of the labour involved in a replacement. But, in the event of a breakdown on the road, they will not pay for the cost of towage to a place of repair. Nor will they pay for any consequential losses or any liabilities which may be incurred as a result of the breakdown.
The insurance will stay in force for a period of 12 months or until the total mileage of the vehicle reaches 25,000, whichever is earlier. There is a limit of £150 per claim and, to eliminate the administrative expenses incurred with small claims, there is an excess of £15 in respect of each and every claim, which is not unreasonable. There is no limit to the number of claims (or their total amount) which may be made during the period of insurance.
Rather naturally, the insurers make it clear that they will not pay for any loss or damage concerning tyres, glass, safety glass, or batteries.
The insurance is not restricted to the United Kingdom, but also includes Western Europe.
It is likely to be a condition that the insurance can be arranged only when a vehicle is actually bought, and the insurance will generally be available through the motor trade rather than through insurance brokers. There is no provision for the extension of the insurance after its expiry.