Automobile insurance companies require drivers they insure have a valid drivers’ license and will not pay...

Automobile insurance companies require drivers they insure have a valid drivers’ license and will not pay 100% of damage claims. Explain why.

Solutions

Expert Solution

As per guidelines of Insurance regulatory authority of nation, It is mandatory for driver to have a valid driving license with him / her while driving the car. If the driver does not have license then not only his insurance claim will be rejected but also he / she can be penalized for driving the car without license. Further, driving the car without license is not legally valid as per Motor vehicles act. Accordingly, considering the provisions of various laws, Driver must have his valid driving license before driving the car. This is the first primary condition for automobile insurance companies to check before they proceed with sanctioning of claim amount. Further, 100 % of damage claimed by person (insured) will never be paid by insurance companies because depending on the car value, insurance terms and conditions, other various parameters to consider while making claim payment.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

12% of all drivers do not have a valid driving license, 6% of all drivers have...

12% of all drivers do not have a valid driving license, 6% of all drivers have no insurance, 4% have neither. The probability that a randomly selected driver fails to have insurance, given that he fails to have a valid license is about

an indication that insurance companies anticipate adverse selection is (a) they do not require a co-pay...

an indication that insurance companies anticipate adverse selection is (a) they do not require a co-pay (b) they classify clients into different risk types according to pre-existing conditions (c) they do not require a deductible (d) the do not classify clients into different risk types according to thier claim history.

Insurance companies take risks. When they insure a property or a life, they must price the...

Insurance companies take risks. When they insure a property or a life, they must price the policy in such a way that their expected profit enables them to survive. They can base their projections on actuarial tables, but the reality of the insurance business often demands that they discount policies to a variety of customers and situations. Managing this risk is made even more difficult by the fact that until the policy expires, the company won

Using the Internet, obtain the income statement for the insurance company where you insure your automobile...

Using the Internet, obtain the income statement for the insurance company where you insure your automobile (casualty insurance company) and perform a vertical analysis of this company. My company of insurance is Progressive.

Which of the following is a screen against adverse selection? Insurance companies require homeowners to have...

Which of the following is a screen against adverse selection? Insurance companies require homeowners to have smoke detectors Rearview cameras in cars. Installing engine monitors to track driving habits of the insured. Prospective secretaries must take a typing test before being hired.

Automobile Insurance Program: Writes a program that prints the insurance fee to pay for a Vehicle...

Automobile Insurance Program: Writes a program that prints the insurance fee to pay for a Vehicle according to the following rules: A Honda that is All Wheel Drive costs $450. A Honda that is two wheels drive costs $350. A Toyota that is All Wheel Drive costs $300. A Toyota that is Two Wheel Drive costs $250. A Nissan that is All Wheel Drive costs $200. A Nissan that is Two Wheel Drive costs $280.

Automobile Insurance Program: Writes a program that prints the insurance fee to pay for aVehicle...

Automobile Insurance Program:Writes a program that prints the insurance fee to pay for a Vehicle according to the following rules:A Honda that is All Wheel Drive costs $450.A Honda that is two wheels drive costs $350.A Toyota that is All Wheel Drive costs $300.A Toyota that is Two Wheel Drive costs $250.A Nissan that is All Wheel Drive costs $200.A Nissan that is Two Wheel Drive costs $280.

Longhorn Insurance offers mail-order automobile insurance topreferred-risk drivers in the state of Texas. The company...

Longhorn Insurance offers mail-order automobile insurance to preferred-risk drivers in the state of Texas. The company is the low-cost provider of insurance in this market with fixed costs of $18 million per year, plus variable costs of $750 for each driver insured on an annual basis. The demand curve for the company is: P = $1,500  $0.005QA. Calculate price and quantity at the profit maximizing level of output.B. Calculate price and quantity at the revenue maximizing level of output.C....

Insurance companies pay for (or cover) health services for employed people who have insurance. What group...

Insurance companies pay for (or cover) health services for employed people who have insurance. What group decides what services will be paid for? A) Federal government B) State government C) Company that issues the insurance policy D) Employer who purchases the insurance

During a recent period of high unemployment, hundreds ofthousands of drivers dropped their automobile insurance....

During a recent period of high unemployment, hundreds of thousands of drivers dropped their automobile insurance. Sample data representative of the national automobile insurance coverage for individuals 18 years of age and older are shown here.Automobile InsuranceYesNoAge18 to 34150034035 and over1900260a. Develop a joint probability table for these data and use the table to answer the remaining questions. If required, round your answers to three decimal places.b.What do the marginal probabilities tell you about the age of the U.S. population?c.What...

Subjects