Page 382 - Motor Insurance Ebook IC 72

The Insurance Times

Older vehicles are not generally maintained
properly. As a vehicle becomes older, defects
appear more frequently and metal fatigue sets in.
The claims experience of insurers in respect of
older vehicles is not satisfactory. Since T.P.
Insurance is compulsory under Motor Vehicles Act,
the insurers can not totally avoid covering the older
vehicles.

Hence they may offer restricted cover or
imposition of excess. But the proposers (owners)
are not satisfied with the offer of the insurers for
restricted cover. Hence, another problem faced
by the insurers is to convince the proposer. Still
while granting cover for older vehicles insurers
prefer to pre- insurance inspection and acceptance
of insurance with excess and restricted cover.

Even after granting cover for older vehicles,
good underwriting practice on the part of the
insurers requires strict watch on the claims
experience so as to decide the acceptance of such
older vehicles for renewal of cover. The
underwriting guidelines adopted in regard to the
insurance of old vehicles differ from insurer to
insurer.

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