Compulsory Third-party Liability Insurance for Motor Vehicles. Accident Insurance for Driver and Owner as Passengers Windshield Insurance

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1 Accident Insurance for Driver and Owner as Passengers Windshield Insurance Insurance Terms This policy is covered by the Insurance Contracts Act No. 20 of 1954 unless otherwise specified in these terms or other provisions of the insurance contract. 1. Who is Insured The policyholder and any person who uses or drives the vehicle with the consent of the policyholder is covered by the policy. If the vehicle is sold, the new owner is insured for 14 days after the change of ownership, providing s/he has not purchased another policy for the vehicle. 2. Scope of Coverage The insurance policy covers every indemnity claim for damage caused by the use of a vehicle against which the policyholder is required to insure him/herself according to current Icelandic traffic law. 3. Damage to One s Own Vehicle The policy does not cover damage to the vehicle of the policyholder or other property belonging to the policyholder. However, the policy does cover damage to the policyholder s own vehicle that was caused by another vehicle owned by the same policyholder. 4. Obligatory Payments by the Company Obligatory payments by the Company for each insurance claim are limited to the amount of insurance stated in the insurance policy or statutory amount of insurance, whichever is higher. 5. Driving in Other Countries: The Geographical Scope of Coverage The insurance policy covers the use of the vehicle in Iceland and in other member states of the European Economic Area (EEA). It is also valid in Switzerland. The policyholder must obtain an international insurance card for the vehicle (a green card ) to drive in a foreign country, provided that the country is party to an agreement regarding the use of such an insurance card. 6. Effective Date, Coverage Period, and Termination The policy goes into effect on the date specified in the policy, in accordance with the insurance application. If the policy has not been issued, the policy goes into effect when the Company or its agent receives the insurance application, unless otherwise agreed. Unless otherwise stipulated, the policy remains in force until hours on the premium s next annual renewal date. The policy can be renewed yearly if it has not been terminated in writing by the policyholder at least one month before the annual renewal date. However, such termination only takes effect if an insurance contract has been signed with another insurance company by this due date. If the Company makes changes to the insurance terms and/or premium base other than those stated in Article 7.1 of these terms, the Company shall be obliged to inform the policyholder specifically of such changes. Otherwise, the notice of termination shall not apply. The termination of the insurance contract must otherwise comply with the provisions of Articles 7, 9 and Premium, Due Date, and the Consequences of Default 7.1 Determination and Renewal of Premium Blaðsíða 1 af 6

2 The premium for this policy will be calculated in accordance with the Company s tariff. The Company reserves the right to determine a renewal premium in accordance with a new tariff regarding a general change in risk, price changes and other causes that disrupt the compensation base. Such changes do not authorize the policyholder or the Company to terminate the insurance contract. 7.2 Information about Claim History When it determines a premium, the Company is entitled to receive information from other insurance companies about the policyholder s past claims experience. 7.3 Date of Payment The first premium is due at the start of the Company s period of responsibility. (See Article 6.) Subsequent premiums shall be due on the first day of each renewal period. The invoice for the premium s payment shall be sent to the policyholder at the address s/he has given to the Company. The posting of a notice or a giro payment order shall constitute a demand for payment. 7.4 Default Should a policyholder default on the premium payment, the Company can terminate the insurance policy according to the Statutory Vehicle Insurance provisions of Regulation No. 392 of 2003 and report the default to the Icelandic Road Traffic Directorate. The Chief of Police is then obliged by this regulation to ensure that the vehicle s license plates are immediately removed from the vehicle. The Company is obliged to notify in writing the party concerned if it intends to exercise this right and to inform him/her of the legal consequences of such a notice. (See also Article l7 of these terms.) Premiums are subject to distress warrant, according to traffic law provisions. 8. Sale of the Vehicle The policyholder must inform the Company without delay if the vehicle has been removed from the register of motor vehicles or sold. The policy only covers a new owner for 14 days after the change of ownership. (See Article 1.) 9. Refund of the Premium When the Policy Lapses or if the Vehicle is Not Used If the vehicle has been sold or removed from the register of motor vehicles, the Company will refund the premium for the remaining part of the coverage period, provided that a new policy has been purchased for the vehicle at the time of the change of ownership. If the policyholder files a claim for a refund of premium following a change of ownership, as per Article 14, paragraph 1 d), as well as Article 8, the Company will refund to the seller the portion of the premium that would have covered the policyholder from the date of the change of ownership through the end of the policy term. If the vehicle has not been in use and its license plates have been in the custody of either the Icelandic Road Traffic Directorate or police authorities for at least 30 consecutive days, the Company will refund the premium for the period of disuse. This, however, does not apply to insurance of tractors, multi-passenger snow vehicles, snowmobiles, light motorcycles, off-road vehicles/all-terrain vehicles [ATVs], vintage vehicles and mobile homes, provided that these terms are taken into account when the premium is determined. 10. The Policyholder s Obligations in the Event of Damage, and Measures Taken as a Result of Damage As soon as the policyholder becomes aware or suspects that a claim for compensation will be made, and if s/he can assume that it will be covered by the policy, s/he must inform the Company in writing. The policyholder may not admit liability or enter into any agreement regarding a liability claim without the Company s consent, with the exception of the provisions of Article 94 of Insurance Contracts Act No. 20 of When an accident takes place or there is direct risk that damage may occur, the policyholder must do his/her utmost to prevent or reduce the damage. Any negligence by the insured regarding these obligations may result in the reduction or forfeiture of the insurance coverage, in accordance with the Insurance Contracts Act. Blaðsíða 2 af 6

3 11. Claims Settlement and Associated Costs When a compensation claim is filed against the policy, the Company has the right to handle both the settlement and the claim s defense before a court of law, if necessary. The Company will pay the resulting costs, but not an amount exceeding the proportion of the insurance sum of the principal of the compensation. 12. The Right to Compensate the Injured Party and Settle the Claim The Company has the right to pay compensation directly to a third party (the injured party). If a claim for compensation is made, the Company may, at any stage, meet its obligations and free itself of further payments by paying the insurance sum as well as accrued interest and costs consistent with the insurance sum. 13. Policyholder s Liability The policyholder must bear personal liability for all incidents of damage if specified in the insurance policy or premium receipt. The Company s claim for the payment of the policyholder s own liability becomes due immediately when the Company delivers a preliminary or full payment for the loss. 14. The Company s Recovery Claim 14.1 Recovery Claim due to Prior Consumption of Alcohol, Use of Other Drugs, Driving without a License, Intent, Gross Negligence, Change of Ownership or Default The Company can claim recovery from the policyholder and/or the driver if the Company has, because of traffic laws or regulations, paid compensation for damage for which the policyholder did not have insurance when: a) The policyholder, due to consumption of alcohol or the use of other drugs, is deemed unable to drive the vehicle safely, or is otherwise unfit to do so according to Traffic Act No. 50 of 1987; b) If the policyholder does not have the right to drive the vehicle in question or has lost his/her license to do so; c) If the damage was caused by intent or by gross negligence; d) If 14 days have elapsed from the date of change of ownership, (See Article 8.), the policy has either lapsed due to nonpayment of the premium or the policy has been terminated Vehicle Rental When a vehicle is rented without a driver in accordance with Car Rental Act, No. 64 of 2000, the insurance policy is valid, and the Company cannot exercise the right to recovery against the policyholder (the renter) even if the renter violates the terms of the insurance policy. The terms remain unchanged in respect to the conduct of the policyholder or a person for whom s/he is responsible. The Company has a right to recovery from the policyholder for damage caused by his/her renting the vehicle without a driver in a way that is not in compliance with Car Rental Act No 64 of However, if the policyholder can prove that damage was not caused by his/her violation of this Act, the Company does not have the right to claim recovery Use of the Vehicle Other Than Specified. The Company has the right to recovery from the policyholder and/or driver when the vehicle is used in a way not specified in the policy Governing Laws The provisions of these insurance terms do not in any way reduce the Company s entitlement to recovery or limit its pursuit of recovery rights under general rules of law, Traffic Act No. 50 of 1987, or Insurance Contracts Act No. 20 of Change of Risk Factor 15.1 Change of Address, Modifications to the Vehicle and Increased Risk The policyholder must inform the Company immediately of a change of domicile. The policyholder must give notice of any modifications to the vehicle or its use that may result in increased risk of Blaðsíða 3 af 6

4 damage. Examples would be the use of special equipment or participation in a motor race. If the policyholder neglects to give such notice, the Company is free of all responsibility, under the provisions of the Insurance Contracts Act No. 20 of Racing The Company serves notice that it is authorized to demand an additional premium if a policyholder is involved in a motor race or practice runs for such a race. 16. Warranty The policyholder is obliged to ensure that the vehicle is in a condition prescribed by law in particular, that its safety equipment is in working order. Negligence in this matter may result in the reduction or forfeiture of insurance coverage, per the Insurance Contracts Act. 17. The Company s Authorization to Terminate the Insurance Contract The Company is authorized to terminate the policy if the policyholder has repeatedly and grossly neglected his/her obligations to the Company. If the Company terminates the insurance contract because of this provision, it is obliged to give the policyholder notice thereof in a verifiable manner and make him/her aware of the implications of such termination. The Company must also inform the Icelandic Road Traffic Directorate of its decision. (See the Statutory Vehicle Insurance rules in Chapter III of Regulation No. 392 of 2003.) The Chief of Police is then obliged, in accordance with the aforementioned regulation, to ensure that the license plates are immediately removed. Furthermore, the Company is liable to a third-party for damage that may occur during the four-week period after the policy s termination, unless another sufficient policy is purchased. Should the insurance be terminated in this manner, the Company will refund the premium for the remainder of the coverage period. 18. Disputes Should a dispute arise regarding the insurance, the dispute shall be brought before an Icelandic court and governed by Icelandic law, unless otherwise stipulated in an international agreement to which the Republic of Iceland adheres. An appeal regarding a liability dispute may be brought to the insurance companies' Loss Commission. The Commission s decision may then be appealed to the Decision Commission on Losses. Further information on these commissions and rules governing their activity may be obtained from the Company. 19. Venue Disputes arising from this policy shall be referred to the Reykjavik District Court. These terms became valid as of February 1, 2004 and replace terms valid as of September 1, Personal Accident Policy for the Driver and the Owner as a Passenger 1. Who is Insured The policyholder as well as anyone who drives the vehicle with his/her consent is insured. Should the vehicle be sold, the new owner is insured for a period of 14 days after the change of ownership, provided that s/he has not purchased a new insurance policy for the vehicle. 2. Scope of Coverage 2.1 Injury Suffered by the Driver The Company compensates the driver for injury suffered in a traffic accident. (See Article 92 of Traffic Act No. 50 of 1987.) Blaðsíða 4 af 6

5 2.2 Injury Suffered by the Policyholder The Company also indemnifies the policyholder for injury suffered in a traffic accident in his/her own vehicle or by his/her own vehicle. (See Article 92 of Traffic Act No. 50 of 1987.) 3. Maximum Compensation According to Traffic Act No. 50 of 1987, the Minister of Justice determines the maximum compensation to be paid for each incident. This maximum insurance sum is reviewed annually. 4. Determination of Compensation Dispute Decisions regarding compensation are made in accordance with Icelandic Tort Law. Should a dispute arise regarding the insurance, an Icelandic court will make its ruling in accordance with Icelandic law. 5. Deductions Compensation paid by this Accident Policy is deducted from the compensation to which the injured party may be entitled under Traffic Act No. 50 of 1987 or other compensation regulations. 6. Policyholder Obligations to the Company 6.1 Loss of Right to Compensation According to the Insurance Contracts Act, the right to compensation for damage may be denied if the policyholder or the insured neglects his/her obligations to the Company, for instance if s/he drives without a valid driver s license, causes damage because of gross negligence, or is under the influence of alcohol or other drugs. 6.2 Sale of Vehicle and Deregistration The policyholder must notify the Company immediately if the vehicle is deregistered or sold. The insurance covers a new owner for a maximum of 14 days after the transfer of ownership, unless a new policy for the vehicle has been purchased. 7. Driving in Other Countries: Geographical Scope of Coverage The policy covers the use of the vehicle in Iceland, other member states of the European Economic Area and Switzerland. Icelandic law applies to decisions regarding compensation for traffic accidents that occur outside Iceland. (See Article 4 of these terms.) 8. Exempted Risks The Company is not obliged to compensate for loss that may be connected to a war, riots, any other civil commotion, strikes or other comparable events. The same applies to damage as a result of nuclear power, radiation or radioactive materials, as well as loss for damage caused by volcanic eruptions, earthquakes, landslides, avalanches or other natural disasters. 9. Discount The provision for a discount on the Third-party Compulsory Motor Vehicle Policy does not apply to this policy. 10. Other Terms Reference is otherwise made to the Company s terms for the Third-party Compulsory Motor Vehicle Policy, as applicable. These terms became valid as of February 1, 2004 and replace terms valid as of September 1, Blaðsíða 5 af 6

6 Windshield (Windscreen) Policy 1. Scope of Coverage The policy covers breakage of the vehicle s windshield (windscreen), including installation cost, unless the policyholder has caused the damage intentionally or through gross negligence. Chips or scratches on the windshield do not constitute breakage. 2. Claim Payment The policy covers the breakage of the front windshield. Compensation is based on the cost of a windshield of comparable quality to the damaged one. Choice of workshop is subject to a prior consent of the Company. The Company does not have an obligation to pay damages for a repair that has been done without a prior consent of the Company. 3. Exempted Risks A windshield that breaks upon removal or installation is not covered. Inability to use the vehicle because of windshield damage is not covered. 4. Policyholder s Liability The policyholder bears as a deductible 15% of the cost of a new windshield. If it is possible to repair a windshield without replacing it, the policyholder pays nothing. 5. Refund of the Premium The premium of this policy is not refunded even if the vehicle s license plates are temporarily placed in the custody of the Icelandic Road Traffic Directorate or the police. 6. Discount The provision for a discount on the Third-party Compulsory Motor Vehicle Policy does not apply to this policy. 7. Other Terms Reference is otherwise made to the Company s terms for the Third-party Compulsory Motor Vehicle Policy, as applicable. These terms became valid as of July 11, 2005 and replace terms valid as of February 1, Top of document Blaðsíða 6 af 6