Legal Tips

Common Terms and Conditions in Motor Policies

Document Date: 24-Oct-1996

Here are some Common Terms and Conditions in "Motor Policies":

Please explain the following common clauses that are found in motor policies

• Extending Cover to an Authorised Driver
  
• Duty to Maintain the Insured Vehicle
  
• Limitation as to Use
  
• Licensed to Drive
  
• Driving under the Influence of Liquor/Drugs

a) Extending Cover to an Authorised Driver

In addition to covering the owner of the vehicle, the motor policy also covers any other person who is driving with the owner's permission. Such a person is known as an authorised driver. This clause covers situations where the owner allows somebody else to drive the vehicle.

b) Duty to Maintain the Insured Vehicle

The insured has a duty to maintain the insured vehicle in an efficient or roadworthy condition. This is to ensure that the vehicle is safe enough to be driven on the roads and also reduces the risk of accident.

c) Limitation as to Use

The motor policy limits the use of the vehicle by expressly stating the purposes for which the vehicle may be used. The policy covers the vehicle when it is used for social, domestic and pleasure purposes and in connection with the insured's business. Some of the uses not covered under the policy are use for hire or reward, racing and carriage of goods in connection with any trade or business.

d) Licensed to Drive

The insured or his authorised driver must be licensed to drive under the relevant laws when using the insured vehicle. They must not be disqualified from driving in any way.

e) Driving under the Influence of Liquor/Drugs

The motor policy does not cover any person who is driving the vehicle under the influence of liquor or drugs. No claim for damage to property will be paid in such a situation. Third party claims for injury or death will be paid but will be subsequently recovered from the insured and/or the authorised driver.