Chapter 6 Flashcards
(35 cards)
Rating for Small and Large Goods Vehicles
- small goods follow motor car ratings
- medium/large vehicles rated by gross vehicle rate
Commercial Vehicle Underwriting Factors
name & address - VAT status, registered number, business address
occupation or business - affects vehicle use and cargo risks, (flammable, toxic)
use classification - own goods, haulage, limited mileage
drivers - age, experience and driving records
vehicles - categorised by plated weight
Special Types
Refers to vehicles of special construction that do not fall under standard vehicle categories
Goods Shops
- breakdown vehicles
- concrete mixers
- cranes
- dump trucks
- ice cream vans
Special Type Vehicle Groups
Group 1 - use is similar to other vehicles in terms of mobility
Group 2 - use is limited to a specific location and operate at low speed
Group 3 - steam traction engines
Group 4 - trolleys not constructed for general road use
Agricultural Vehicles
Vehicles used by farmers, market gardeners, smallholders or hired to local authorities
Examples : tractors, threshing machines, harvesters, grass driers
Agricultural Vehicles Area of Use
Low-risk: rural locations, little traffic, low claims
High-risk: timer haulage on roads may increase premiums
Agricultural Public Hire Vehicles
Exposure is higher due to frequent use in high-traffic areas
Rates vary based on cover, district, car group and limitations
Self-Drive Hire Vehicles Rating Methods
Turnover basis - large operators with high vehicle volume
Flat rate per vehicle - for small operators with fewer vehicles
Day-by-day rates - for occasional hire businesses
Driving Instructor Vehicles
Must be on the register of Approved Driving Instructors (ADI)
Buses, Coaches and Minibuses Radius of Use
- long distance journeys are treated differently than local, regular contracts
- coaches for professional sports clubs present high passenger risks
Coaches and Minibuses Risks
- risk is higher for vehicles with more than 17 seats
- passenger risk depends on the nature of the organisation and risk management
- large coaches can cost over £200,000 to replace
- coaches carrying sports supporters are vulnerable to targeted vandalism
Motor Trade - Named Driver Basis
- suited for small businesses with a limited number of drivers
- cover applies only to named drivers
Motor Trade - Trade Plate Basis
- issued to move unlicensed vehicles for defined business purposes in the UK
- exempt from registration and road tax
Motor Trade - Points Rating
- common for medium to large businesses
- points are allocated for the number of drivers, vehicles and trade plates
Fleet-Rated Risks & Premium Calculation
- consists of large groups of vehicles owned by an organisation
- premiums assessed based on the claims experience of the fleet
- premium calculations consider vehicle types, claims frequency, claims costs and risk factors
Fleet Risk Management
- monitoring claims frequency, driver training and vehicle maintenance
- security systems, blind spot lenses, driver training and use of telematics can improve risk management
Contingent Liability
- covers the risk when employees use their own vehicles for business
- rating is typically per employee and is based on the number of employees
- premium generally not affected by NCD
Occasional Business Use
- covers employees who use their own vehicles occasionally for business purposes
- it’s a primary cover which indemnifies both the policyholder and the employee
- rating is based per employee and on the type of cover
Commercial Breakdown Insurance
- pricing varies depending on how it is marketed
- considers factors such as vehicle age, type, mileage and driver age
Treaty Reinsurance
- automatic, obligatory reinsurance covering all risks within a defined scope
- must cede all risks within the treaty’s scope
Proportional Reinsurance
- insurers retain a portion of the insurance, ceding the balance to the reinsurer
- quota share arrangement is common, where premiums and losses are shared proportionally
Excess of Loss Reinsurance
- reinsurer only becomes liable when a loss exceeds the ceding insurer’s retention
- retention amounts vary based on the size and type of the insurer’s portfolio
Stop Loss Reinsurance
- covers losses when the ceding insurer’s annual loss ratio exceeds an agreed percentage
