a) Classifying risks
- Because of rate differentials, correct classification is essential to a profitable automobile insurance business. The underwriter must be alert to producers that classify many applicants in low rate categories and those that leave questions unanswered on the application.
b) Rating drivers according to driving records
- Placing risks in low rate categories when they do not qualify can result in high loss ratios for the insurer. Other driving considerations are important, such as driver training courses.
c) Placing risks in the correct rate groups
- It is vitally important that all vehicles be assigned to the correct rate group.
d) Using endorsements correctly
- Underwriters must understand and correctly use endorsements, or which there are 2 kinds:
These are used for additional coverages the producer has recommended and the client has purchased,
excess underinsured motorist protection, loss of use coverage, or coverage for liability for damage to non-owned vehicles.
2) Agreements or restrictions
- These are required by the insurer based on acceptance and rating manuals,
limitation of amount or value endorsements for antique cars, reduction or deletion of coverage, or restriction of coverage for a named driver.