(a) Outline three types Of policy in motor insurance. (b) List and explain three scopes of cover. in motor insurance.

(a) Three types of policy in motor insurance

1. Private motor policy: This policy is designed for vehicles used for social, domestic, pleasure and private business purposes. It does not cover use for hire, reward or commercial carriage of goods.
2. Commercial vehicle policy: This covers vehicles used for business purposes, such as carrying goods, passengers or materials in connection with trade. Examples include lorries, vans, taxis and buses.
3. Motor cycle policy: This is designed for motorcycles, scooters and similar two-wheeled vehicles. It provides cover for the rider’s legal liability and may include fire, theft and accidental damage, depending on the scope selected.

(b) Three scopes of cover in motor insurance

1. Act only cover: This is the minimum cover required by law. It provides compensation for third-party bodily injury or death caused by the use of the insured vehicle. It does not normally cover third-party property damage or loss of the insured’s vehicle.
2. Third party only cover: This provides indemnity to third parties for death, bodily injury and damage to their property caused by the insured vehicle. It does not cover loss of or damage to the insured’s own vehicle.
3. Comprehensive cover: This is the widest scope of cover. It covers the insured’s legal liability to third parties and also covers loss of or damage to the insured vehicle arising from accident, collision, overturning, fire or theft, subject to the policy terms.