Multiple choice

No Claim Bonus in motor insurance recognises

  1. deductibles

  2. moral hazard

  3. loading of premium

  4. declinature of cover
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

No Claim Bonus is a powerful strategy to improve underwriting experience and forms an integral part of rating systems. This bonus recognises the factor of moral hazard. It rewards the insured for not lodging claims either by adopting better driving skills as in motor insurance or taking better care of his health as in mediclaim policies.

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