Page 216 - Motor Insurance Ebook IC 72

The Insurance Times

proposal form reveals information which is used not only
for rating purposes but also for underwriting the risk,
i.e. deciding whether to accept the risk and if so the
extent of cover to be offered and the terms and
conditions thereof.

The underwriting of motor business may be
considered under the following headings:
1. The Vehicle
2. The Use of the Vehicle
3. The geographical area of operation
4. The driver of the vehicle
5. The claim experience;

The use of the vehicle;
The risk exposure due to the purpose for which the
vehicle is used is taken care of in the rating systems
adopted by the companies. The use to which vehicles
are to be put, even those of the same class, is a deciding
factor in the relative degree of risk involved.

Private cars represent a lighter risk than taxies which
are subject to optimum utilization. Owner-driven taxies
are a better risk than those which are driven by others
who are paid salary or commission. The later may not
have any interest in the proper maintenance of the
vehicle or in its safe operation.

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