The wording of certificates of car insurance varies within wide limits according to the various classes of insurance and the underwriting car insurance company or syndicate. A few insurers still print different certificates for private cars, commercial vehicles, motor cycles and motor trade risks with many different wordings according to the type of use of the vehicles concerned. However, the majority of insurers produce a basic certificate that is applicable to most car insurance and motor risks.
The Certificate of Car Insurance is the only ‘legal document’ as such within the sets of documents you get sent when you buy car insurance. it is currently needed to purchase Road Tax from a Post Office or to priove to the police that you are the registered keeper and car insurance policyholder.
The electronic delivery of Certificates of Insurance has recently been approved in the UK and with the Introduction of the Motor Insurance Database, proving cover, the certificate of car insurance will soon become a thing of the past in the paper world.
The main headings to practically all certificates of motor insurance are identical. A specimen wording of a private car certificate is shown as an Appendix to this lesson.
- Registration Mark of Vehicle (or description of vehicles).
- Name of policyholder.
- Effective date of the commencement of insurance for the purposes of the relevant law.
- Date of expiry of insurance.
- Persons or classes of persons entitled to drive.
- Limitations as to use.
Heading number 1 is often changed to read ‘Description of vehicle’ and this is used when the insured vehicle is not registered and has to be identified by its engine or chassis number or where there is more than one vehicle insured – as under a motor trade policy or under a blanket type of certificate.
The use to which the vehicle may be put is regulated by the wording entered under heading number 6 above. The policy general exceptions state that the insurer shall not be liable in respect of any accident injury loss or damage occurring while the motor vehicle is being used otherwise than in accordance with the ‘limitations as to use’ contained in the effective certificate of insurance.
Similar reference is made in the general exceptions in relation to persons entitled to drive, so that it is unnecessary to describe the drivers in the policy itself (see heading number 5 above). Tthe provisions relating to persons entitled to drive as defined in the policy and certificate can – and do – occasionally produce problems for insurers.
With private car insurance insurers may omit the registration mark of the vehicle from the certificate and insert in lieu the following wording:
Any motor car the property of the policyholder or hired to him under a hire purchase agreement. Certificates issued in this form are known as ‘Blanket’ certificates and their prime objective is administrative economy – the need for a new certificate to be issued for a replacement vehicle is avoided. Before the advent of ‘blanket’ certificates the insured would normally have to contact his insurers or his broker for a cover note each time he changed his car, since the certificate in his possession would show the registration particulars of the vehicle which had been disposed of. The obsolete certificate would have to be returned to the insurers and a fresh certificate showing the new vehicle registration details would be issued. All this, not unnaturally, would involve time, inconvenience and expense and the system of ‘blanket’ certificates helps to avoid all these disadvantages since the policyholder is not deprived of his effective certificate of insurance, even for a limited period, following a change of vehicle. It should be noted, however, that insurance certificates are still occasionally issued when the insured vehicle has particular characteristics which cause the insurers to give the risk individual attention and assessment – e.g. if the vehicle is a sports or veteran type under a classic car insurance policy.
It should also be emphasized that where a ‘blanket’ certificate has been issued to an insured, the onus is on the latter to advise his insurers of any change of car as soon as it is reasonably practicable – i.e. within no more than a few days after the substitution has occurred. So long as the insured complies with this requirement, full cover is maintained by the insurers.
For example, if an insured changes his vehicle and sends a letter to his insurers the same day notifying them of the fact, he will have complied with the notification requirement and if a claim should arise within the few days after that the insurers would undoubtedly handle it in the normal way, notwithstanding the fact that the insured may not yet have received from them any confirmation that the substitution had been recorded.
If, on the other hand, the insured fails to comply with the notification requirement his insurers might well insist that only ‘Road Traffic Act’ cover was in force from the date on which the substitution occurred until such time as the change has been recorded by the insurers and if an accident has occurred in the intervening period, the insured could find himself in a very difficult position. Obviously ‘blanket’ certificates are designed for administrative convenience and economy, but safeguards have to be built into the system to ensure that it is not abused. Without the notification requirement insurers could find themselves on risk for vehicles which, ordinarily, they would not wish to cover and they obviously have to protect their own interests.
The certificate of car insurance does not provide the policyholder with full details of the policy cover and at the bottom of each certificate there usually appears a note which says for full details of the insurance cover reference should be made to the policy.
The issue of a certificate of car insurance ensures that all vehicle users, whoever their insurers, are in possession of a common form of document which states clearly the essential particulars of their car insurance. In this way the work of the authorities in enforcing the insurance provisions of the relevant Act is facilitated.
Certificates of car insurance, like cover notes, must not be ante-dated. A certificate of motor insurance, moreover, will expire on the same day as the policy itself and this means that a new certificate is required at each renewal of the policy. The issue of a fresh certificate of motor insurance will be necessary if there is an alteration in cover or changes to the terms of the contract.
Just as Car Insurers are bound to issue a certificate of motor insurance, so the policyholder had certain obligations. If the policy is cancelled the insured must surrender and return his certificate of car insurance within seven days or make a statutory declaration to the effect that the document has been lost or destroyed. Failure to comply with the above is an offence under s. 147 (4) of the Road Traffic Act 1972 and subsequent amendments.
Car Insurers place a great deal of importance to a declaration that an insurance certificate has been lost or destroyed.
When insurers receive a request to cancel a policy or amend its terms and are informed that the relevant certificate has been lost or destroyed, the normal practice is for the insurers to send to the insured a form which the latter has to complete to show why the certificate cannot be returned. The form has to be signed and dated by the insured and his signature has to be witnessed. This is designed to protect the insurers in the event that a claim is subsequently presented and there is a dispute as to whether the policy in question actually was in force at the time of the accident giving rise to the claim.