Page 222 - Motor Insurance Ebook IC 72

The Insurance Times

inherent principle of insurance viz. the premiums are paid
by the many into a pool from which the claim of few are
paid. It is not fair, it is argued, that when through the
years the insured has had the protection for which he has
paid the premium, should be rewarded because the peril
against which he has been covered, has not arisen.

The other arguments advanced are:
a. It creates extra clerical work for insurers in

calculation of premiums and preparation of renewal
notices-work which is out of all proportion to its
value.

b. It leads to many disputes between the insured and
insurers, e.g. claims settled under knock-for-knock
agreement. The insured who considers himself
blameless would resent the forfeiture of his discount.

c. At any rate the policy contains a condition that the
insured shall take all reasonable steps to safeguard
the vehicle from loss or damage and maintain it in
efficient condition. He has also to act, under
Common law, as if he is uninsured; it is therefore,
inconsistent to offer a further incentive to care.

The arguments for the no claims discounts are:
Where physical hazard is of importance in motor

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