Chapter 2: Insurance Products - Types (F203 Appx. 2) Flashcards
Liability insurance
Provides INDEMNITY where the insured,
… owing to some form of tort,
… is legally liable to pay compensation to a third party.
Tort
A civil wrong or injury,
… not arising out of any contract,
for which action for damages may be sought.
Liability insurance claims are usually made on 2 bases:
- breach of contract
- negligence.
8 Main types of liability insurance
- Employers’ liability / workers’ compensation
- Motor third party liability
- Marine and aviation liability
- Public liability
- Product liability
- Professional indemnity and errors and omissions (E&O) liability
- Directors’ and Officers’ (D&O) liability
- environmental liability and pollution liability
Benefits under any liability insurance
An amount to indemnify the policyholder fully against a financial loss.
However, subject to any statutory requirements, this benefit may be restricted by:
- a maximum indemnity per claim (the sum insured) or an aggregate maximum per year
- a maximum indemnity per event (this may involve more than one claim)
- an excess
Any legal expenses relating to such liability are usually also covered.
An illegal act of negligence will often invalidate the cover.
Employers’ Liability
Indemnifies the insured against legal liability to compensate an employee or his or her estate for bodily injury, disease or death suffered, owing to negligence of the employer, in the course of employment.
Loss of - or damage to employees’ property is usually also covered.
When might employers be liable
If they are negligent in providing their employees with safe working conditions.
If failing to
- provide a proper working place with proper equipment in which the employee can work
- properly maintain the working place as well as the tools and equipment
- create and enforce proper working procedures and methods
The benefit of employers’ liability insurance
Can be in the form of regular payments to compensate for disabilities that reduce the employee’s ability to work, lump sum payments to compensate for permanent injuries to the employee and benefits under the legal framework.
Legal costs will also be covered.
Other costs such as care costs can also be included.
Compulsory cover
In many countries, cover is compulsory and may sometimes be provided by State funds to which employers contribute (eg The compensation for Occupational Injuries and Diseases Act, 1993 in South Africa)
Motor third party liability
The insurance indemnifies the owner of a motor vehicle against compensation payable to third parties for personal injury or damage to their property.
Motor third party liability:
Possible “heads of damages”
- loss of income (often split between loss of past income and loss of future income, with each considered separately)
- medical and nursing costs (including hospital costs)
- compensation for pain and suffering
Motor third party liability
Compulsory cover
In most countries, such cover is compulsory, although precise rules vary - for example the amount of cover required.
Motor third party liability:
Compulsory cover in South Africa
In SA, motor liability insurance is not compulsory, unless the car has been bought on credit, in which case comprehensive insurance is compulsory (a condition set by the lending bank).
Marine and aviation liability insurance
The insured is indemnified against the legal liability to compensate a third party for bodily injury, death or damage to property arising out of operation of the vessel or aircraft.
Public liability insurance
The insured is indemnified against legal liability for the death of or bodily injury to a third party or for damage to property belonging to a third party, other than those liabilities covered by other liability insurance.
Public liability insurance:
2 Main types of cover
- the risk at insured’s own premises
- the risk when work is carried out by the insured away from their own premises
Product liability insurance
Indemnifies the insured against legal liability for the death of or bodily injury to a 3rd party, or for damage to property belonging to a 3rd party, that results from a product fault.
The policy usually also covers legal costs.
Some policies will include the cost of recalling faulty products that have not actually caused damage.
Professional indemnity insurance
Indemnifies the insured against legal liability for losses resulting from negligence in the provision of a service, for example unsatisfactory medical treatment or incorrect advice from an actuary or solicitor.
Directors’ and Officers’ Liability insurance
Indemnifies the insured against the legal liability to compensate third parties owing to any wrongful act of the insured in his or her capacity as a director or officer of a company.
Directors’ and Officers’ Liability insurance:
Compulsory cover
Holding professional indemnity insurance is often a legal or regulatory condition of being allowed to practise a profession or may be imposed as a condition by a professional body.
Environmental liability insurance
The insured is indemnified against the legal liability to compensate third parties as a result of bodily injury, death and damage to property as a result of unintentional pollution for which the insured is deemed responsible.
The costs of cleaning up the pollution and regulatory fines may also be covered.
Gradual and sudden environmental pollution will generally both be covered.
Employers’ liability:
3 groups of insured perils
- accidents caused by the negligence of the employer or by other employees
- exposure to harmful substances
- exposure to harmful working conditions
Motor third party liability:
2 categories of perils
- loss or damage to the property of third parties caused by the insured vehicle
- bodily injury and death of third parties caused by the insured vehicle.
Marine and aviation liability:
4 categories of perils
- loss of or damage to passengers’ property, including luggage
- bodily injury and death of passengers either while on board the vessel or aircraft or when boarding or leaving the aircraft.
- bodily injury caused by the vessel or aircraft
- damage to property caused by the vessel or aircraft
Product liability:
Perils (4)
Depend on the nature of the product being produced, but include:
- faulty design
- faulty manufacture
- faulty packaging
- incorrect or misleading instructions
Professional indemnity:
Perils
The perils depend on the profession of the insured.
Directors’ and Officers’ liability:
Perils
- allowing a company to continue operating in circumstances when it should have been declared insolvent
- any act resulting in the insured being declared unfit for his or her role
- allowing false financial statements to be published
Environmental liability:
Perils
The insured perils can be regarded as any incident causing gradual or sudden environmental pollution.
Employers’ Liability:
Basis for cover
Most classes of business are written on the basis of when the loss was incurred, (cover relates to the date of the accident rather than the date of reporting of the accident)
Employers’ liability:
Problems with the basis of “when the loss was incurred”
- Where an industrial disease results from prolonged exposure, it is hard to define the “accident date”.
- Because many diseases take a very long time to develop fully, there have been extensive reporting delays with employers’ liability.
Motor third party liability:
Basis for cover
loss-occurring basis
Marine and aviation liability:
Basis for cover
loss-occurring basis
Public liability:
Basis for cover
Depends on the exact cover provided, although its likely to be on a losses-occurring basis.
Public liability insurance may be combined with other insurances, eg residential buildings and contents products may include public liaiblity cover.
Product liability:
Basis for cover
Usually written on a claims-made basis
Environmental liability:
Basis for cover
Policies are likely to be written on a claims-made basis
Measures of exposure to which premiums are related :
Employers’ liability
Person-hours worked could be the best exposure when assessing claim frequency.
However, claim settlements are often related to loss of earnings so, in practice the main measure of exposure for employers’ liability is payroll or total wage and salary costs.
Measures of exposure to which premiums are related:
Motor third party liability
The sum-insured vehicle-year.
I.e., an agreed monetary premium is charged for the insurance of a single car worth R1 a year.
Measures of exposure to which premiums are related:
Marine and aviation liability (5)
- passenger kilometers (number of passengers times km travelled)
- passenger voyages
- in-service seats
- in-service vessels / aircraft
Turnover is still the most commonly used measure (although not accurate)
Measures of exposure to which premiums are related:
Public liability
Most commonly used measure of exposure is turnover.
An alternative is payroll.
Measures of exposure to which premiums are related:
Product liability
The most commonly used measure of exposure is turnover.
Measures of exposure to which premiums are related:
Professional indemnity
The most commonly used measure of exposure is turnover.
Measures of exposure to which premiums are related:
Environmental liability
The measure of exposure will depend heavily on the nature of the industry carried out by the insured.
2 Causes of settlement delays on liability insurance business
- delays caused by establishing liability
- time to establish the extent of injuries and to assess the speed of recovery
Possible causes of accumulations of risk in liability insurance (2)
- court award inflation
- an insurer who provides cover for several employers in the same industry is exposed to the possibility that a large number of claims will emerge from a common cause (eg asbestosis)
court award inflation
If there is a court award in favour of a claimant, it may trigger a large number of similar claims from individuals with the same complaint against their employer
Risk factors and rating factors:
Employers’ liability and public liability (2)
- type of industry / occupation(s) of the insured
- extent to which the employer implements safety measures
underwriting factors:
Employers’ liability and public liability insurance (12)
- type of industry or occupation
- exposure and claims experience
- location of the workforce
- frequency of visitors to the site
- the materials handled
- the processs involved
- safety precaustions in place, eg sprinklers in a factory or office
- turnover
- size of deductible*
- payroll
- level of staff training and safety standards
- provision of first aid facilities
Rating factors:
Marine and aviation liability (6)
- loss history
- type of craft or vessel
- commercial category
- satellites and missiles also attract separate rating structure
- use of craft or vessel
- geographic region
3 commercial categories of marine/aviation
- commercial
- private
- military
Risk factors: Product liability (6)
- Nature of the products produced by the insured
- the distribution channel of the product
- how much US-exposure the product has (in general, US has more claims likely to be made)
- its usage
- the general trade of policyholder
- any potentially dangerous components within the product, and how quickly they deteriorate
Risk factors:
Professional indemnity
Nature of the profession and company.
Risk factors: Environmental liability (4)
- the processes carried out by the insured
- the likely effects of any accident
- the likely cost of clean-up
- a general assessment of the risk management practices of the insured.
Property damage insurance
Indemnifies the policyholder against loss of or damage to the policyholders’ own material property
10 Types of property subject to such damage
- residential buildings
- commercial and industrial buildings
- moveable property (contents)
- land vehicles
- marine craft
- aircraft
- goods in transit
- construction
- engineering plant and machinery
- crops
4 types of land vehicles (subject to damage)
- private motor
- commercial vehicle
- motorcycle
- motor fleet
Benefits on:
Household buildings property insurance
The principle of indemnity:
Benefit is the amount required to fully reinstate the property, rather than the market value of the property
The benefit is subject to any excess or deductible.
Ancillary costs may also be covered (but are not standard)
Often include insurance for liabilities arising from the insured property
Eg of Ancillary costs wrt Household buildings property insurance
Provision of alternative accommodation while the insured property is uninhabitable
Benefits on:
Commercial buildings property insurance
The cover (sum insured) is likely to be for the amount required to fully reinstate the property, although it may be on a first loss basis.
When might first loss cover be appropriate (on commercial buildings property insurance)? (3)
- the insured considers that a loss in excess of the sum insured is extremely unlikely
- the item is effectively priceless (eg a stately home) for which there may be no possibility of the building being reinstated
- the insurance is against water damage (where only the ground floor areas may be affected)
Benefits on:
Contents insurance
The sum insured is based on the value of the contents
The amount paid on a claim can be:
- the replacement value (the cost of a new item reduced to allow for depreciation)
- the cost of an equivalent brand new item (“new-for-old” basis)
Benefits on:
Motor property insurance
The maximum benefit for a claim on the insured’s vehicle is the depreciated value of the vehicle.
This can be as book value, market value or retail value. (book value being the lowest, retail, the highest)
Usual cover under comprehensive motor policies (6)
- specific injuries to the insured and/or spouse (fixed benefit)
- personal medical expenses
- the insured’s legal expenses in relation to any claim
- loss or damage to personal effects that were in the car
- replacement of locks after theft of car (if car is recovered)
- replacement / repair of broken windscreens
Benefits on:
Marine insurance
- loss of or damage to the craft (“hull insurance”)
- loss of or damage to the cargo
other types:
- compensation for loss of use of the craft (business interruption cover)
- insurance against damage to a vessel still under construction.
The claim will equal the full sum insured in the event of an actual total loss or constructive total loss.
“cargo insurance”
Insures the actual contents on the ship
“freight” cover
covers the money payable for shipment of the cargo that will not be received if the shipment is not delivered.
Actual total loss is deemed to occur in one of 3 ways:
- where the insured item is totally destroyed
- where it is so damaged that it can no longer be classed as the type of object originally insured
- where the insured is irretrievably deprived of the insured item
Constructive total loss
where the insured abandons the insured item because an “actual total loss” is unavoidable or because the costs of preventing a total loss exceed the value saved.
Goods in transit insurance
Commercial insurance cover against loss of or damage to goods whilst being transported in vehicles specified in the policy.
The periods of loading and unloading are usually covered in addition to the journey.
Goods in transit assurance:
Benefits
The sum insured is likely to be the value of the goods.
Losses due to business interruption (eg if equipment is not delivered on time) aren’t usually included.
A special extension is usually required if livestock are to be covered.
Construction and engineering insurance
Provide cover against
- damage and destruction during construction / engineering projects and
- also cover in the event of failure to finish the project.
Crop insurance
Indemnifies the insured against losses to their crop due to specified perils.
Extended warranty insurance
Covers losses arising from the need to replace or repair faulty parts in a product beyond the manufacturer’s normal warranty period.
Motor property insurance: perils covered
accidental or malicious damage to the insured vehicle, and fire or theft of that vehicle.
Marine hull cover: perils (7)
- perils of the seas (or other navigable waters)
- fire
- explosion
- jettison (goods being thrown overboard in an attempt to save the ship from sinking)
- piracy
- sinking
- damage, etc
Sections included under marine property insurance (5)
- marine hull cover
- marine cargo cover
- energy (offshore, onshore and construction)
- liability (third party property)
- specie (more valuable items in transit)
- war
“traditional definition of marine insurance”
“anything that a seagull can fly over”
perils of goods in transit (3)
- Damage
- loss
- theft
Construction insurance perils (5)
- damage
- destruction
- design defect
- faulty parts
- failure to finish the construction project
Engineering insurance perils (3)
- Machinery breakdown
- explosion
- electronic failure
Extended warranty peril
Faulty manufacture
Crop Insurance perils (3)
- disease
- fire
- weather-related perils (storms or drought)
Property damage insurance basis for cover
Losses-occurring basis
Measure of exposure to which premiums are related: Household property (buildings and contents)
Usually measured in sum insured years: the sum for which the property is insured multiplied by the period at risk.
Measure of exposure to which premiums are related: Commercial property (buildings and contents)
Usually the
- sum insured year
- or EML
2 Reasons for which the sum insured year is not simple to determine
– the amounts of stocks held may vary considerably over the period of the insurance. Hence, the stock may be covered on a declaration basis, determined retrospectively with an adjustment premium
– there is no standard way of allowing for inflation in the policy. Hence policies with different types of inflation treatment need to be considered separately to determine the exposure.
Measure of exposure to which premiums are related:
Motor property
Vehicle-kilometers would probably be the best measure of exposure for damage claims.
Measure of exposure to which premiums are related:
Marine property
The insured value of the hull or the value of the cargo might be used as exposure measures (for the hull and contents insurance respectively)
Measure of exposure to which premiums are related:
Goods in transit
The consignment value is most commonly used.
Measure of exposure to which premiums are related:
Construction
The value of the contract may be used as an exposure measure.
Measure of exposure to which premiums are related:
Engineering insurance
The sum insured value or value of the contract may be used as an exposure measure.
Measure of exposure to which premiums are related:
Extended warranty
The number of appliances, or appliance-years could be used as an exposure measure.
Claim characteristics:
Household and commercial property
The event giving rise to a claim for damage to buildings or contents usually occurs suddenly (as for fire or burglary) and the cause is easily determinable.
Notification is also made promptly and a reasonably good estimate of the claim amount can be made.
Settlement is in many cases by a single payment, but larger claims can take longer and may be settled with intermediate payments as the building project to repair or replace the building proceeds. Delays may be greater where it is necessary to verify the value of the stock held in a commercial property.
Claim characteristics:
Motor property
Claims for damage to the insured’s vehicle are usually reported and settled quickly.
Claims for damage to the property of third parties may take slightly longer to settle than claims for damage to the property of the insured.
There may be some delay in settling property claims while the liability for settlement is established.
Generally, delays for settlement of property claims should be in weeks or months rather than years.
Claim characteristics:
Marine and aviation property
- Claims are usually reported as soon as the vessel reaches a major port and reporting delays may be very long after the initial advice of the incident
- The insured is likely to notify the insurer of an incident having taken place fairly quickly. However repairs may be deferred until the vessel is scheduled for its next refit, when the full extent of the damage and the likely costs incurred will be reported to the insurer.
- Settlement delays might be long if there is a dispute over legal liability or the amount that should be paid
- Minor damage is often repaired when the vessel goes into dock for routine maintenance
- Claim amounts can vary from relatively small amounts for minor hull damage to small vessels to very large amounts.
How might accumulations of risk occur with marine insurance
- Geographical concentration would make an insurer exposed to the possibility of lots of claims arising from one incident (eg storm)
- If a ship spills hazardous material in a populated coastal area, there may be many liability claims
Claim characteristics:
Goods in transit
May be reporting delays if claims are not reported until vehicles or vessels reach their destination.
Claim size depends on the goods being transported, while claim frequency depends on the method of transport (land vehicle, marine craft, aircraft).
Claim characteristics:
Construction and engineering
Property claims can generally be reported and settled quickly, although as with other classes, serious damage may take relatively long time to repair.
Liability claims will take longer to settle as liability needs to be established before amounts of loss can be determined.
Claim characteristics:
Extended warranty
Claim costs are fairly uniform by product, as they are related to the cost of the original product.
Where repairs are covered, there is a risk of multiple repairs being needed, which may increase the claim cost above the original price of the goods.
Common rating factors for Household property (buildings and contents) insurance (18)
- sum insured
- number of rooms
- location
- the voluntary or compulsory use of excesses
- whether there is any business use of the property
- whether the policyholder owns or rents the property
- whether it is a house or flat or some other construction
- type and standard of construction
- age of the building
- types of locks and/or burglar alarms fitted
- whether smoke alarms have been fitted
- high risk contents
- dog ownership
- family composition
- smoker / non-smoker
- type of heating
- age of policyholder
9 Rating factors for Commercial property insurance
- estimated maximum loss
- age of building
- fire protection equipment
- construction type
- excesses
- location of building
- hazardous building materials
For larger risks:
- qualitative impressions: such as the nature of the adjacent buildings and how well the company is run
- previous claims experience: especially with smaller claims (large claims are so rare that past experience of them is unlikely to be credible)
10 Motor property insurance risk factors
- the number of miles driven
- the density of the traffic where the car is driven
- the ability of the driver
- the speed at which the vehicle is usually driven and its general level of performance
- the ease with which the vehicle can be damaged and the cost of repairing it.
- the theft risk
- weight of the vehicle
- fire risk
- Policy excess (it will affect claim size and frequency)
- Other proxy rating factors
13 other rating factors used as proxies for risk factors in Motor property insurance
- the use to which the vehicle is put (eg business use)
- the age of the vehicle
- the occupation of the policyholder and other driver
- whether there are additional drivers of the vehicle as well as the policyholder
- sex of the main driver
- age of policyholder and other drivers
- whether or not driving is restricted to certain named drivers
- make and model of vehicle
- the extent of any modification to the engine or body
- location of the policyholder
- where the vehicle is kept overnight (on road / driveway / garage)
- whether or not the driver has any driving convictions
- past experience.
4 Important rating factors for fleet motor insurance
- types of vehicles
- type of cover
- level of excess
- types of use and goods carried
4 Main risk factors for marine and aviation property
- size
- type
- age
of the craft / vessel - nature of the cargo
5 Important rating factors for marine and aviation property
- the type and value of the craft
- the scope of the voyages
- the areas covered or the destination
- the number and experience of the crew
- previous claims experience
5 rating factors for goods in transit
- mode of transport
- nature of goods
- type of storage used (eg refrigerated)
- time period of transit and number of stages
- length of time spent at warehouse
5 rating factors for construction and engineering
- type of project (eg apartments, airport, tunnel)
- term of project
- contracting firm
- materials and technology used
- location of the project
3 rating factors for extended warranty
- make and model of the item being covered
- the length of the manufacturer’s warranty
- the term of the warranty
5 categories of financial loss insurance
- fidelity guarantee
- credit insurance
- creditor insurance
- business interruption cover (consequential loss)
- legal expenses cover
Fidelity guarantee
Covers the insured against financial losses caused buy dishonest actions of its employees.
These include
- loss of money or goods owned by the insured or for which the insured is responsible and
- reasonable fees incurred in establishing the size of the loss (auditors)
Fraud
wrongful or criminal deception intended to result in financial or personal gain
Embezzle
To steal or misappropriate funds placed in one’s trust or under one’s control.
Credit insurance
(aka pecuniary loss insurance)
Covers a creditor against the risk that debtors will not pay their obligations.
2 Types of credit insurance
- trade credit
- mortgage indemnity
Trade credit
May cover uncollectable debts.
Mortgage indemnity
Covers the lender (mortgagee) in a mortgage loan against the risk of the borrower defaulting and the value of the property on which the loan is secured not being sufficient to repay the loan.
Creditor insurance
(aka payment protection insurance)
Provides cover to insureds who are subject to obligations to repay credit advances or debt.
Business interruption cover
(aka consequential loss & loss of profits)
Indemnifies the insured against losses made as a result of not being able to conduct business.
The benefit will be calculated so that after the claim payout the insured achieves the same net profit as they would have if the claim incident did not occur.
5 Factors to consider when calculating the benefit on Business interruption cover
- Turnover will drop dramatically after a major fire, but should start building up again as production facilities can be restarted.
- When the policy is taken out, the proposer will need to assess how long it will take to rebuild the business in the event of a major disaster.
- Profit will depend on the proportions of fixed and variable costs incurred by the business. The insured will not be compensated for expenses that are incurred while business is not being conducted.
- Additional temporary costs may also be incurred as a result of the fire
- Assessing what the turnover figure would have been without the fire will also have to take account of:
- – any inherent seasonal variation in the business
- – any organic growth (or shrinkage) in the business itself
Legal expenses cover
Indemnifies the insured against legal expenses incurred as a result of:
- legal proceedings being initiated against the insured
- the need for the insured to initiate proceedings
Normally cover payments to legal representatives.
Financial insurance: Insured perils
- dishonest actions by employees (fidelity guarantee)
- failure of third parties specified in the policy (credit)
- accident or sickness resulting in loss of income with which to repay debt (creditor)
- fire at the insured’s own property (business interruption cover)
- fire at a neighboring premises causing loss of access to own property (business interruption cover)
- legal proceeding being brought against the insured.
Financial loss insurance: Basis for cover
Financial loss insurance is likely to be written on a losses-occurring basis.
Legal expenses insurance is sometimes written on a basis combining losses-occurring and claims-made.
Measure of exposure to which premiums are related:
Fidelity guarantee and credit insurance
Measure of exposure will depend on the precise cover provided.
Measure of exposure to which premiums are related:
Creditor insurance
The exposure measure for creditor insurance on personal loans is normally the amount of the loan or the total amount repayable.
Measure of exposure to which premiums are related:
Business interruption cover
The exposure measure for consequential loss is the annual profit or turnover.
This cannot be known in advance, so adjustment premiums are common once the annual profit or turnover is known.
Measure of exposure to which premiums are related:
Legal expenses cover
The number of policyholders or policyholder-years are possible exposure measures for legal expenses insurance.
Claim characteristics:
Fidelity guarantee insurance
It may take a long time to discover that there has been fraudulent behaviour by employees, so there may be reporting delays for fidelity guarantee insurance.
Settlement delays could be significant, as it may take time to establish the size of the loss.
Claim characteristics:
Credit insurance
The claims experience on mortgage indemnity guarantee insurance depends heavily on economic factors.
The state of the economy also influences the frequency and severity of claims on trade credit insurance.
the size of individual mortgage indemnity claims is unlikely to be too high because the claims are for the gap between the sale value of the property and the outstanding value of the loan,
Accumulation of risk with credit insurance
the accumulation risk due to the link to the economy can lead to high aggerage losses for the insurer during tough economic times.
Claim characteristics:
creditor insurance
Normally a series of payments made until the insured recovers or the limit on payments is reached.
Frequency of claims depends on factors such as the rate of unemployment and the likelihood of policyholders becoming sick or having accidents.
Claim characteristics:
Business interruption cover
For business interruption cover claims, the reporting delays are directly linked to any associated property claim.
Settlement, however is likely to be slower than for property claims, owing to the greater need for diversification.
Risk factors and rating factors:
Fidelity guarantee and credit insurance
Fidelity guarantee and trade credit are commercial policies that will be individually underwritten, and the nature of the business and the size of the sums at risk will be taken into account.
Risk factors and rating factors:
Creditor insurance cover
Creditor insurance cover for personal loans is usually provided at a fixed price percentage of the amount lent or the total amount repayable.
Risk factors:
- age
- sex
- employment status
- occupation
- state of health
- amount of monthly benefit
Risk factors and rating factors:
Business interruption factors
Similar to commercial property and damage insurance
Risk factors and rating factors:
Legal expenses cover
Normally based on the sum insured
Insured perils:
Personal accident cover
Any form of accident that results in the loss of limbs or other specified injury.
Basis for cover:
Personal accident cover
Personal accident insurance will typically be written on a losses-occurring basis
Measure of exposure to which premiums are related:
Personal accident cover
The best measure of exposure is sum insured person-years
Claim characteristics for personal accident cover
- Usually reported quickly
- Claim frequency tends to be reasonably stable
- Claims can be large
Risk factors for personal accident cover
- Sum insured
- occupation
- age
- sex (women less accident-prone)
- health
- dangerous pastimes
Rating factors are the same as the risk factors (they can all be measured.
3 Main levels of motor insurance cover
- Third party liability
- Third party, fire and theft
- Comprehensive
