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Hello > Rating Factors > Flashcards

Rating Factors Flashcards

1
Q

What is rating factor?

A

Number of facts and circumstances insurances companies look at to work out the right amount of premium for each customer

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2
Q

Why are rating factors important?

A

So insurance companies work out the right amount of premium for each customer

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3
Q

How is the right amount of premium determined?

A

By customer’s answers to questions about their current circumstances, historical information and general facts that we enter into our system.

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4
Q

What are the main categories of rating factor?

A
  1. current circumstances, 2. historical information, 3. general facts
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5
Q

What are current circumstances?

A

Are they live, occupation, car they drive…

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6
Q

What are historical information?

A

e.g. previous claims made by the customer

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7
Q

What are general facts?

A

e.g. Customer’s age

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8
Q

What personal details do insurance companies need to determine the right amount of premium for a motor insurance customer?

A

DOB, occupation, gender

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9
Q

What vehicle details do insurance companies need to determine the right amount of premium for a motor insurance customer?

A

make/model, engine size, modifications, security, value of the car, date of registration, registration plate, non standard vehicles, purchase date

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10
Q

What driving history details do insurance companies need to determine the right amount of premium for a motor insurance customer?

A

type of license, motoring convictions, claims, medical conditions, no claims bonus, driving bans, criminal convictions

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11
Q

What use of car details do insurance companies need to determine the right amount of premium for a motor insurance customer?

A

drivers, use of car, any drivers policy, main user, additional drivers, fronted policies

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12
Q

What does fronted policy mean?

A

When a teenager is added under the policy of their parent/adult

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13
Q

What does ABI stand for?

A

Association of British Insurers

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14
Q

According to who are young (17-20)/old (61-65) drivers more likely to be involved in an accident?

A

Association of British Insurers (ABI)

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15
Q

What aged people are more likely to be involved in an accident?

A

17-20, 61-65

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16
Q

Why is marital status a rating factor?

A

Statistically people develop more cautious when they get marries and are less likely to be careless drivers.

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17
Q

If the person seeking to be insured has just returned to Britain after 18 months what is their residency date?

A

The date they returned to the UK

18
Q

Why is occupation an important rating factor?

A

The likelihood of them having a claim can be influenced by different occupational causes. There are associated risks involved in certain types of employment. Also if someone is unemployed, they are more likely to make a claim.

19
Q

What are the categories of occupation?

A

Acceptable, requiring terms and decline

20
Q

What are acceptable occupations?

A

Most occupations such as doctors or builders

21
Q

What are occupations requiring terms?

A

For example motor trade employees. These occupations would mean that the policy would have an exclusion of e.g. driving other cars.

22
Q

What occupations mean a decline in getting a motor insurance?

A

Professional sportsman, journalists, pro photographers, musicians…

23
Q

Which occupations would increase the price of the customer’s insurance?

A

Estate agents, delivery drivers, home carers…

24
Q

When can you enter a customers “none-unemployed” as unemployed?

A

If they are claiming jobseekers allowance

25
Q

When can you enter a customers occupation as “none-retired”?

A

Only if they don’t have a part-time occupation. If they do the part time occupation needs to be entered as a primary occupation.

26
Q

When can you enter a customers occupation as student/housewife/houseparent/not in employment/disability?

A

Only if they don’t have a part-time occupation. If they do the part time occupation needs to be entered as a primary occupation.

27
Q

What do you need to do if a customers occupation is a carer “non professional”?

A

Must be referred to ask the insurer what class of use is required.

28
Q

What is IMS?

A

A database where all internal calls are recorded; this ensures the information we give when referring is recorded and we have a trail if we ever need to investigate.

29
Q

Is gender a rating factor anymore?

A

No, it is not since December 2012.

30
Q

Why is postcode and address a rating factor?

A

It reveals where the vehicle is mainly kept and where it is normally driven. If there’s a high level of congestion, it is more likely to be involved in an accident. Also car crime can be common in cities but practically unheard of in remote places.

31
Q

Why is postcode an important rating factor?

A

Insurance companies have statistics on claims at each postcode sector so they know exactly how much of a risk each area is (even down to individual streets).

32
Q

What postcode is the premium based on?

A

Where the vehicle is kept overnight (eg nightworker will have it at a parking lot/side street).

33
Q

Why is it important to have both the correspondence address and the address where the vehicle is kept if it’s different?

A

So the insurer can decide which address to rate on.

34
Q

Why is overnight parking important to the premium?

A

If the car is parked in the street, there is more chance of it being stolen and/or someone crashing into it. Many insurance companies give discount if the car is garaged or parked on a driveway.

35
Q

What are the overnight parking options?

A

Garage, driveway, public road or car port.

36
Q

Why is credit scoring important to the premium?

A

It reveals info like address, electorate roll check, previous bankruptcy rulings, country court judgements which will be used as a rating factor.

37
Q

What is credit scoring?

A

Publically available information on the client like address, electorate roll check, previous bankruptcy rulings, country court judgements. This is NOT a credit check and will not impact a customers credit rating.

38
Q

Are credit scoring and credit check the same thing.

A

No. Credit scoring done by insurance companies is NOT a credit check and will not impact a customers credit rating. However there will be a ‘soft footprint’ left on the customer’s credit file.

39
Q

What does rating factor mean?

A

Information used to calculate risk and premium of insurance

40
Q

Why do young drivers pay more for insurance?

A

Lack of experience

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