CMFAS PGI Motor Insurance question: motor insurance product

CMFAS PGIMotor Insurance

Which two principles are described as anchoring the motor insurance product?

A Compulsory third-party injury cover to protect innocent victims, and indemnity without enrichment
B The No-Claim Discount to reward careful drivers, and the voluntary excess to lower premiums
C Utmost good faith in disclosure, and automatic betterment on every repair and total loss
D Open driving for any licensed driver, and repairs only at approved Motor Claims Framework workshops

Show the answer and explanation

Answer: A. Compulsory third-party injury cover to protect innocent victims, and indemnity without enrichment

Two principles anchor the product: compulsory third-party bodily-injury cover exists to protect innocent victims, and indemnity ensures the insured is restored to but not enriched beyond the pre-loss position.

Common mistake

Selecting pricing mechanisms or an incorrect 'utmost bad faith' principle instead of compulsion and indemnity.

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Related CMFAS PGI questions

A motor policy excludes liability arising while the driver is under the influence of alcohol or drugs above the legal limit. If an intoxicated insured causes an accident injuring a third party, what is the likely position on the compulsory third-party injury cover?How should a learner treat the exact reporting time limits and approved-centre lists under the Motor Claims Framework?A finance company holds a hire-purchase interest in an insured car that is written off. How is the total-loss payment typically handled?

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Original study material mapped to the public CMFAS PGI syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.