All on-line car insurance is underwritten on the basis of information supplied on the website’s proposal form. The information forms the basis of the contract and is often incorporated into it by specific reference into what is called the recital clause of a policy.
The completed form is useful as a record of the risk and as a basis for statistics. Invariably it contains a declaration warranting that all the answers given to the questions asked are true.
The Car Insurance policy itself is evidence of the insurance contract, although, it is not the contract itself.
However, as the policy describes the parties, the car insurance cover, the consideration, the events leading to compensation, and any special regulations and conditions applying to the contract, it is vitally important.
In the case of disagreement inevitably following an accident or a claim, the terms of the policy may be subject to interpretation by the courts.
The terms used to distinguish the sections of a motor insurance policy are known in the industry as follows:
1. Recital clause: setting out the scope of the car insurance cover and specific exceptions. This may be divided into sections if more than one type of cover is included for example fully comprehensive and third party fire and theft.
2. Operative clause: setting out the scope of the cover and specific exceptions. This may be divided into sections if more than one type of cover is included.
3. Attestation clause: authorising the policy by the signature of the underwriter or other senior official.
4. General exceptions: setting out the general exceptions to the cover provided.
5. Conditions: listing express conditions in order to define or limit the contract (such as the procedure to be followed in making a claim or altering the contract.
Car Insurance Policy wordings are often complex and difficult for the layman to comprehend.
Motor Insurers often issue with the policy a statement of cover in plain language, called either the car insurance policy summary or key facts document, to assist policyholders to understand the insurance protection provided, but these summaries do not cover everything in the policy.
Some Car Insurers have, therefore, tried to simplify the wordings themselves. There are dangers in this area since the traditional wordings have been tried and tested in the courts, whereas simplified translations are unproved and may import areas of uncertainty as to the cover provided.
Nevertheless, the experiments are a welcome sign that in the twenty first century motor insurance is not wedded to the past, but that in both principle and practice it is constantly developing to serve the driving community more effectively.
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