Craig
I can only speak for the Rover switch, but I am sure others are much the same. The inertia switch detects harsh movements in the car such as, as you pointed out an impact, but more so, a roll. It has a small ball bearing sitting on a magnetic plate inside witch moves, and rises to move a spring loaded split plate, and breaks the circuit to the fuel pump relay, the engine then dies as the fuel pressure drops due to no pump. So the engine in essence does not stop instantly, but soon, probably two to three seconds.
The function of the relay is just as any relay.
Steve
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