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INSURANCE
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COVERAGE
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On the road
The compulsory motor insurance law, which was passed in January, is now
currently in effect. Make sure as a driver to have at least third-party
insurance or else the ISF (Internal Security Forces) will seize your
vehicle.
While it may be heartbreaking to see an uninsured vehicle worth thousands
of dollars reduced to a heap of worthless mangled metal after an accident,
the real value of motor insurance is less in the vehicle itself than in
the personal injury claims that can arise from an accident. So motor insurance
is divided into two basic categories: Third party liability, which covers
injury claims from people as well as material damage to the other vehicle
involved, and All Risks, which can cover virtually any eventuality. The
devil is in the detail. Neither kind of policy may cover as much as motorists
believe, since much of the coverage in motoring insurance is included in
the add-ons at an extra charge.
Third party
liability
A motorist who is at fault in an accident, either wholly or partly,
is liable to pay the other motorist(s) involved for vehicle repair
and personal injury, whether in compensation claims or perhaps
even medical treatment. Third party liability (TPL) insurance indemnifies
a driver against these claims but does not cover damage to the
insured’s vehicle. It is the most basic form of motor insurance
and usually the legal minimum requirement in countries where having
motor insurance is compulsory.
Insurance companies stipulate a maximum level in their liability
either for personal claims or damage to the other vehicle(s). The
limits can be as low as $5,000 and as high as $500,000, or even,
in the case of bodily injury, up to $1 million. However, in cases
where unlimited liability for bodily injury is agreed, there is
usually a limit for material damage. Material damage may cover
not only other vehicles, but also, for example, a house or a building
damaged after an accident. Bodily injury claims may come from anyone
(save some or all of those in the insured vehicle – see below)
hurt as a result of the accident, whether pedestrians or occupants
of other vehicles involved. The annual costs, or premium, for TPL
ranges between $100 and $150, with the level being fixed by many
factors, such as the horse-power of the vehicle, coverage limit,
and in some cases, depending on the insurance company, the model
of the vehicle. The rule of thumb is that the bigger the engine
and the sportier the car the more expensive the insurance, even
TPL. The most common horsepower brackets are up to 15, 16 to 24,
and above 24. Similarly, the higher the coverage limit the higher
the premium for vehicles of the same horsepower.
Limitations
Some insurance companies apply a deductible from claims of around
$50 if the driver is under 21 years old or if the applicant has
held a driving license for less than one year. While there may
be stipulations regarding the age of the driver, there are, in
the main, no such restrictions concerning the age of the vehicle,
at least not for TPL coverage. Since repairs to the insured vehicle
are not a factor, no account is taken of its condition or that
restoring it to roadworthy condition may well be more expensive
than an equivalent car because of deterioration caused through
age. Nor is the increased likelihood of an old car being involved
in an accident solely by virtue of its age and declining condition
taken into consideration. There is no inspection of the vehicle
involved in taking out TPL cover. To apply for coverage involves
only completing an application form and providing a photocopy of
the vehicle’s registration certificate. The application usually
requires details about the applicant, car details, and the type
of use of the car. Standard TPL insurance covers use for domestic
and pleasure purposes, not for work reasons, which is available
but usually more expensive.
Top
Exclusions
As important as the items that are covered in basic TPL insurance
are the items that are excluded. These can be crucial when a claim
arises. Insurance companies will usually not indemnify the insured
for bodily injury or material damage arising, directly or indirectly,
out of situations such as:
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An intentional or fraudulent act by the insured car;
•
A malicious act, such as tampering with the brakes, done to the
insured vehicle by any of the ‘related’ people;
•
Driving the insured vehicle against the flow of traffic (so driving
the wrong way down a one-way street invalidates the insurance);
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Engaging in a rally or race of any kind;
•
Driving without a valid license;
•
Carrying more passengers than the allotted number of seats;
•
Towing another vehicle or being towed or transported by one;
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Driving under the influence of alcohol or drugs.
Some of those exclusions can be covered by paying an additional
premium, save those, of course, that involve breaking the law.
Additional services
Many insurance companies have contracts with towing companies to
provide help in the event of an accident, or even a simple breakdown.
This service may be complimentary or subject to an additional premium
of around $10. In TPL cover there is no provision for replacement
of the insured vehicle while it is being repaired. This service
is provided only to all risk policyholders. TPL may be extended
to cover driving in Syria and is subject to an additional premium
between $30 and $60. The Syrian authorities are considering making
coverage by Syrian insurance compulsory for driving on their territory.
It is also possible within TPL insurance to cover bodily injury
for the occupants of the insured vehicle, subject to an extra premium.
This addition increases the premium, commonly by $15 to $30, while
still keeping it lower than the price of an all risk policy.
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Additional services
Many insurance companies have contracts with towing companies to
provide help in the event of an accident, or even a simple breakdown.
This service may be complimentary or subject to an additional premium
of around $10. In TPL cover there is no provision for replacement
of the insured vehicle while it is being repaired. This service
is provided only to all risk policyholders. TPL may be extended
to cover driving in Syria and is subject to an additional premium
between $30 and $60. The Syrian authorities are considering making
coverage by Syrian insurance compulsory for driving on their territory.
It is also possible within TPL insurance to cover bodily injury
for the occupants of the insured vehicle, subject to an extra premium.
This addition increases the premium, commonly by a range of $15
to $30, while still keeping it lower than the price of an all risk
policy.
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All risk
insurance
Also known as comprehensive, all risk insurance policy covers
all the provisions of TPL (including most of the add-ons), as well
as damage to the insured vehicle itself. The damage may be caused
either in an accident, or perhaps by fire, or maybe vandalism.
As ever, it is important to check what circumstances are covered
and what are not. The term ‘own damage’ is commonly
used to refer to the material damage caused to the insured vehicle
as a result of an accident. All risk coverage also indemnifies
the insured for damage to the insured vehicle arising out of fire.
Theft also figures in most all risk insurance although again it
is important to check what is covered and what is not. The most
common coverage of theft indemnifies the insured for loss or damage
as ‘the result of theft or attempted theft by forcible means.’ Partial
theft – i.e/ a bit of the car, such as the radio being stolen – is
usually excluded from this general theft coverage. Hold ups by
latterday highwaymen are also usually excluded from standard all
risk policies, although cover can be obtained for an extra premium.
Premium
range
The premium for all risk insurance is necessarily much higher
than that for TPL since the company is covering many more risks.
It is calculated differently than the third party premium, which
is a flat fee within certain brackets. All risk premium is a percentage
of the value of the car at the time of taking out the insurance,
and the percentage varies depending on the age of the car, and
in some cases the type of the car. The percentage can be reduced
if the policyholder is willing to bear a part of the bill for each
and every accident that occurs. The sum of money borne by the insured
is called a deductible.
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Limitations
The same limitations applicable for the age of the driver in TPL
are also true in all risk. Some insurance companies apply a deductible
of around $50 if the driver is less than 21 years old or if the
insured has held a driving license for less than one year. Neither
youth nor inexperience is seen as a virtue by the issuers of motor
policies. Since the company will be covering damage to the insured
vehicle itself, its age is definitely of interest to them, unlike
the case for TPL. Insurance companies generally do not agree to
an all risk insurance policy for a vehicle that is more than 10
years old. A new car doesn’t need to be inspected by the
insurance company, save perhaps to ensure that it exists at all.
This prevents issuing cover to a vehicle that has already been
totally destroyed but for which the registration document still
exists. In the case of a used car, the applicant for all risk insurance
may be asked to make the vehicle available for a mechanical inspection.
The result of that may be a determining factor in the level of
the premium since insurance companies do not want to cover cars
already in need of repair. The better the vehicle condition the
lower the risk of this, and the lower the premium.
The application process for all risk insurance coverage is similar
to that for TPL – fill in a form and provide a copy of the
car registration document. A limitation not present in TPL is the
minimum premium. Since the coverage is more comprehensive and inclusive
of several factors, insurance companies usually set a minimum premium
ranging between $350 and $500. And to include theft coverage it
is necessary not only to have an approved burglar alarm fitted,
but also to affirm that it was set at the time the vehicle was
stolen.
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Exclusions
The exclusions under TPL are also applicable in the case of all
risk. There are, however, some extra categories. The insurance
company will usually not indemnify the insured for material damage
arising, directly or indirectly, out of situations such as:
•
A manufacturing defect, of wear and tear, of any electrical or
mechanical failure or evident lack of maintenance;
•
Theft or attempted theft as a result of a hold-up;
•
Airbags, and headlight wipers (sometimes subject to be added with
additional premium)
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Deductibles
The term deductible is common in many types of insurance. In brief,
a deductible is paid by the insured toward the total cost of a
claim. Thus, in a $700 bill, a policyholder who agreed to a $300
deductible would pay that amount toward the cost, with the insurance
company paying out the remaining $400. The practise was introduced
to prevent a series of small claims, which cumulatively could become
very expensive for the insurance companies. In return for bearing
some of the risk themselves, policyholders are offered a lower
premium. All risk insurance policies generally come with a deductible,
which ranges between $50 and $300, the most common being $100 and
$250.
Additional services
Like TPL policies, all risk insurance usually embraces a prearranged
contract with a towing company to assist the insured in the case
of an accident or a breakdown. This service may be complimentary
or subject to an additional premium of around $10. The majority
of all risk insurance policies also offer a car replacement service
up to a limited number of days while the insured vehicle is being
repaired. Again like TPL, these policies can be extended to provide
cover while driving in Syria.
All insurance companies offer the option of covering bodily injury
to driver and related passengers but it should not be automatically
assumed that this is part of an all risk policy. Where it is an
extra, the additional premium is in the range of $15 to $30. Cover
against a hold- up – excluded from regular theft coverage
under all risk – can be added at an extra cost, which varies
from one company to another. Also excluded from normal theft coverage
is partial theft, meaning theft of parts or accessories. Partial
theft can also be included and is subject to an additional premium.
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Additional
services
Like TPL policies, all risk insurance usually embraces a prearranged
contract with a towing company to assist the insured in the case
of an accident or a breakdown. This service may be complimentary
or subject to an additional premium of around $10. The majority
of all risk insurance policies also offer a car replacement service
up to a limited number of days while the insured vehicle is being
repaired. Again like TPL, these policies can be extended to provide
cover while driving in Syria.
All insurance companies offer the option of covering bodily injury
to driver and related passengers but it should not be automatically
assumed that this is part of an all risk policy. Where it is an
extra, the additional premium is in the range of $15 to $30. Cover
against a hold up - excluded from regular theft coverage under all
risk - can be added at an extra cost, which varies from one company
to another. Also excluded from normal theft coverage is partial
theft, meaning theft of parts or accessories. Partial theft can
also be included and is subject to an additional premium.
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How
to make a claim
In case of an accident, it is crucial to follow the instructions
written on your motor policy, otherwise a claim may be rejected.
Usually, there is a list of claim officers, also known as traffic
experts, attached to the policy. You should telephone the traffic
expert appointed to the geographic location of the accident. Don’t
leave the scene of the accident or move any of the vehicles involved
before the traffic expert arrives and completes an inspection.
In the absence of an expert’s report, deductibles will be
charged, usually around $100, even if they do not form part of
the original terms of the policy.
Next, call the insurance company as soon as possible and provide
them with your policy number, the driver’s name at the time
of the accident, and the exact location of the accident. There
is usually an accident declaration form provided with the policy.
This form should be filled in and delivered to the insurance company’s
office generally no later than 72 hours after the accident. Details
regarding the time, exact location, circumstances of the accident,
as well as the nature of material damage to your vehicle and to
the third party’s vehicle are required in the form, as well
as any bodily injury. In addition, the form also would ask for
your policy number and the identity of the third party and any
insurance policy held. If the insurance company also covers material
damage to your vehicle, you must not get it repaired before receiving
the company’s official approval and assessment of damages.
Without these, you may have to pay the repair bill yourself, even
if you do have all risk insurance.
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