Page 209 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

insured establishes an accident free record. Again
premium discounts are offered if the insured is willing
to bear a certain portion of the loss himself. These
incentives not only result in reduced cost of insurance
but also encourage careful driving.

Insurer's indirect contribution to road accidents
prevention is also exemplified in their system of the
underwriting which involves careful 'risk selection'
and 'risk improvement.' The bad driver for the
accident prone drive is penalized by compulsory
excess' older vehicles is accepted only after
satisfactory inspection or subject to restricted
coverage. These measures have the effect of giving
the insured a personal stake in preventing accidents.

The multiple losses which occur in road transportation
can be traced to three types of causes- 'Human cause
(e.g. drunken driving over speeding and other violations
of traffic law) etc. and 'Environmental Cause' (e.g. bad
road conditions, inadequate lighting, insufficient traffic
signs and signals etc).

In other words, there are four primary factors responsible
for road accidents-the driver, the vehicle, the pedestrian
and the road. And the largest number of accidents is
attributable to driver's fault. The critical area of remedial

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