Question
A number of classic cars are held in a museum. The broker and insurer agree to insure the vehicles under a material damage policy whilst on display. The broker supplies the list of vehicles to the insurer each year and the insurer agrees to insure them on an agreed value basis of settlement. Under the material damage policy, the broker collects a FSL levy on each and every vehicle and for a full year.
On occasion, some of the vehicles may be taken out of the museum and used on road and for events such as weddings, classic car shows, Santa parade etc. The insurer and broker agree to arrange a motor vehicle policy that covers this on road use and associated liability (section 2). The policy does not list all of the vehicles but simply ™covers occasional use of any museum vehicle whilst on road∫ up to a maximum value of $400,000. The basis of settlement is the same as under the material damage policy. Neither the broker nor the insurer is certain of how to charge the FSL levy (if any) under the motor policy. Presumably we would not need to charge a FSL twice?
Can you please clarify?
Reply: Cameron Taylor
If there are two policies that cover the same asset, then levy is payable on each policy. I understand that there is a fairness question about it, however the Fire Service Act 1975 is very clear that levy is payable on each policy where fire is covered.
This concerns the NZI Broadform Liability policy and the Contractual Liability Exclusion, in particular (a) which is being quoted to decline this claim:
"You are not insured for liability that you have agreed to assume under a contract, unless:
(a) you would have otherwise have been legally liable in the absence of that contract,"
