Page 130 - Commercial - Underwriting Mandates & Guidelines Binder

Motor Traders
3.3 All new business quotations and renewals to be submitted to Hollard for approval prior to providing terms.
3.4 Social domestic and pleasure use must be underwritten with caution, all drivers must be named in the schedule.
3.5 Treat dealerships dealing in older or lower value vehicles as Accommodation risk.
3.6 Theft of vehicles in the open
3.6.1 As theft of vehicles kept at the insured premises is automatically included, it is imperative that cover be restricted for vehicles kept in the open as these pose a higher theft risk (not only for the vehicle itself but also spare parts and accessories kept therein or thereon) compared to vehicles locked in a secure building overnight.
3.6.2 In instances where this is the case, note the following warranty on the policy schedule: "Vehicles in the Open
It is hereby warranted that:
1. Theft of accessories and/or spare parts are excluded unless the entire vehicle is stolen.
2. Vehicles are to be locked and keys kept in a locked safe at the close of business failing which theft cover is excluded."
4. MAXIMUM ACCEPTANCE LIMITS
Sedan, LDV, SUV, MPV
Commercial vehicles, busses
Agriculture
Special types
Motorcycles
Other
Watercraft
Values exceeding above limits must be referred to Hollard for approval. Facultative reinsurance may be required.
Class or type of vehicle
Own damage limit (VAT exclusive)
R2 500 000 Refer Refer R550 000 R150 000 Refer Decline
5.
RATING
5.1
5.2 5.3
5.4
Motor Trader’s premiums were previously based on salaries, wages and/or commission with adjustments for own damage limit and optional extensions.
Unfortunately, this method is no longer accurate as the correct values are not always disclosed. There are two rating methods that can be used:
1. Premium calculated on the past performance of the risk (claims trending).
2. Flat rates applied to own damage limit, third party liability limit and optional extensions.
Method 1 – claims trending:
5.4.1 5.4.2 5.4.3 5.4.4
Calculate premium based on past performance of the risk.
Establish the inception and/or renewal date of the policy.
Obtain 3 year loss history (including blow by blow claims).
Apply a percentage increase to total gross claims per year (period of cover must start with inception/renewal date) to make allowance for inflation and other increased costs:
45% 35% 25%
Period of cover
Year 3
Trend
Year 2
Year 1 (current year)
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Commercial Underwriting Mandates and Guidelines – Binder – Version 4 2022