chapter 6 Flashcards
How does underwriting for commercial vehicles differ from private motor insurance?
Commercial vehicle underwriting requires more individual assessment due to varied risks, higher liabilities, and premiums
compared to the more standardized underwriting for private cars.
How are small goods vehicles rated compared to medium and long-distance haulage vehicles?
Small goods vehicles are often rated similarly to motor cars
medium and long-distance haulage vehicles are rated based on broader classifications such as gross vehicle weight and geographical exposure.
Why is VAT status important for commercial vehicle proposals?
VAT status determines whether the insured can recover VAT on claims costs, reducing the insurer’s outlay.
What additional information is required for commercial vehicle proposals?
Details on vehicle storage, business address, nature of goods carried, use classification, and driver qualifications are required.
Is third-party cover for attached trailers automatically included in commercial vehicle policies?
No, cover for trailers must be declared and an appropriate premium applied.
Detached trailer cover often requires additional premium.
What is required for trailers traveling abroad?
Trailers over 750kg (or 3,500kg for specific types) must be registered with the DVLA, display a registration plate, and comply with Green Card requirements when traveling to certain countries.
What are examples of vehicles categorized as “special types”?
Breakdown vehicles, cranes, skip carriers, livestock carriers, and ice cream vans
How are “third-party working risks” handled for special types?
Third-party working risks are insured under motor policies if on a road, but may fall under liability insurance when off-road.
How are public hire vehicles rated?
Rated based on high usage, traffic density, cover required, and location (e.g., separate rates for London taxis).
What distinguishes radio-controlled private hire from other private hire risks?
Radio-controlled private hire presents higher risks due to unscheduled journeys, shift work, and casual employees, requiring stricter underwriting.
What is fleet rating, and when is it applied?
Fleet rating applies to policies covering multiple vehicles and is based on the claims experience of the entire fleet rather than individual vehicles.
How are fleet premiums adjusted?
Premiums are adjusted periodically based on total vehicle years, claims experience, and changes to the fleet.
What driver details are crucial for underwriting commercial vehicles?
Age, experience, driving history, and training records are essential to assess driver-related risks.
Why are open driving policies common for commercial fleets?
High driver turnover makes it impractical to restrict cover to named drivers, though this increases premiums.
How is breakdown insurance rated?
Based on vehicle type, age, mileage, and the chosen level of cover. Stand-alone products often use flat rates.
What is treaty reinsurance?
An agreement where the reinsurer automatically accepts specified risks from the insurer, either proportionally or non-proportionally.
How does facultative reinsurance differ from treaty reinsurance?
Facultative reinsurance is arranged for individual risks outside treaty scope, allowing the reinsurer to accept or decline each risk.
What is contingent liability in motor insurance?
Covers the employer’s liability when employees use their vehicles for business purposes without adequate business insurance.
