Page 228 - Motor Insurance Ebook IC 72

The Insurance Times

is important from the underwriting point of view.
As a vehicle becomes older, defects appear more
frequently and metal fatigue sets in. Old vehicles
are normally inspected before underwriting and
subject to their condition, they are accepted for
insurance with or without excess and/or for
restricted cover.

b) The purchase price or the insured's estimated
value - Since there is no pro rata condition of
average in motor policy, careful attention has to be
paid to the insured's estimated value in relation to
age of the vehicle. This is essential to avoid dispute
in the event of Total Loss.

c) Imported cars- Greater care is to be exercised in
underwriting imported cars and sports cars.

(ii) Use of the vehicle - Following are the considerations:
a) The purpose for which the vehicle is used - This

has link with exposure of risk. This aspect is taken
care of in the rating system adopted by the tariff.
Private cars pose a lighter risk than taxis which are
subject to much greater utilization. Similarly private
carriers are better risks than public carriers as the
latter are exposed to a greater incidence of accidents
and wear and tear.

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