Page 229 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

b) Goods carried in case of goods carrying vehicles -
The general nature of the goods carried in respect
of a goods vehicle is also an important aspect for
underwriting purposes, especially if they are
flammable or likely to explode.

(iii) Area of operation- The exposure to risk depends
upon the area in which the vehicle is used. This is a
physical hazard. In the rating system for private cars
the tariff and has taken care of this aspect wherein the
rates differ according to the zones in which the car is
used. (Zone A and B)

(iv) Proposer of the vehicle - These considerations
are to take care of Moral Hazard. In comparison to
physical hazards like the physical condition of the vehicle
or the use to which it is put or the area in which it is
used the proposer/owner of the motor vehicle is more
responsible for bad claims experience.

While considering the acceptance of new proposals, it
may not be easy to ascertain all aspects of moral hazards.
But the owner's behavior and attitude during the
currency of the policy and when a claim arises will be
indicative of the moral hazard. This aspect will have to
be borne in mind at the time of renewal.

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