Based on this leeway to insurers the extra Cover or Add-ons are now being offered by insurers.
Motor insurance in India has substantially followed the practice of the UK insurance market. Internationally Motor is non tariff business except in some of the less developed countries of Asia and Africa.
Underwriting in motor insurance involves: i. Underwriters critical analysis; ii. Long term underwriting strategy; iii. Risk profiling; iv. The Vehicle; v. The Use of the Vehicle; vi. The Area of Operation; vii. The Driver of the Vehicle; viii. The claims experience; ix. No claim discount; x. Moral Hazard; xi. Other factors in determining premiums; xii. Accident repairing cost; xiii. Competitive premium model
The Indian motor insurance market is ridden with lack of sound underwriting policy, lack of IT compatibility of data extraction & analysis and to convert the data into usable electronic form, to analyse true cost of motor risk.
Basis of rates in India is engine capacity and carrying capacity of the vehicle, sum insured; and geographical location.
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