Policy Holder Obligations

Obligation 1
Obligation 2

The obligations of car insurance policyholder are clearly set out in the document entitled General Policy Terms. The section on the obligations begins:

"Failure to comply with any of the following conditions may invalidate your cover."

There are 2 main obligations, together with an explanation listed below:

Obligation 1

Obligation 1 has a number of subsections all beginning with the words "You must ensure that:"

"the car is kept in a roadworthy condition" The unsafe condition of a car increases the chance of it being involved in an accident. Smooth tyres, faulty brakes and defective lights can all cause accidents.

"all reasonable steps are taken to safeguard the car against loss or damage" If the car is stolen or damaged as a result of negligent behaviour by the customer, the company may repudiate the claim but the onus of substantiating the repudiation will rest with the company.

"The car is locked, windows and other openings are closed, any required security devices are activated and all keys and keyless entry system devices are removed when it is left unattended." In order to safeguard the car against loss it should be locked at any time it is left unattended, even when it is parked on private property. If the car insurance premium has been calculated, or the car has been insured, on the basis that an immobiliser is fitted, then that device must be activated at all times if the car is left unattended. If the device is broken or not activated and the car is stolen, any resulting claim will be repudiated.

"We are supplied with true and complete information about the car and the insured drivers" It is an underlying principle of insurance that the customer must disclose true and complete information so that the risk can be determined accurately.

"all reasonable requests made by us are complied with" There are certain things the company may ask the customer to do. This includes:

• Sending us a copy of the driver's licence, of the driver who was driving the car during an accident
• Taking the car to a recommended repairer when requested to do so

"the police are notified within 48 hours of you or the Regular Driver becoming aware of any incident involving theft, attempted theft or malicious damage and a crime reference number is obtained." In order to have a reasonable chance of apprehending a criminal, or recovering stolen goods, the police must be notified of the crime as quickly as possible. The police will recover 90% of stolen cars in the 3 days after the theft.

"no costs are incurred, and that no admission of liability, offer or settlement is made to a third party without our consent" In order for the company to control the cost of claims each claim must be verified and approved by the company before the repair may be carried out. Few drivers will have the legal knowledge required to establish who is at fault in a motor accident. The customer should not admit liability, or offer to pay for any damage, without the prior consent of the company.

Obligation 2

We must be notified as soon as possible of:

"a change of address for where the car is normally kept overnight (the risk address) , as well as any change to the postal address" When a customer moves house the risk address needs to be re-underwritten as soon as possible particularly as it is one of the main underwriting criteria for assessing the car insurance premium. It is also important that we have the correct postal address on record, so that we can send any post to the correct address.

"you or the Regular driver becoming aware of any accident or loss involving this car or of any other incident which may lead to a claim by you or by a third party." By taking action quickly after an incident, which may lead, to a claim, the insurance company can limit the losses in claims from it's own customers and put itself in a better position to defend against liability claims.

We need to be kept informed by customers of any change of personal circumstances. Some changes will not affect the car insurance policy until renewal.

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