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How can underwriters determine whether the concentration of values poses a concern for a fleet of autos?
By assessing the insurance coverage details
By knowing where the insured vehicles are stored when not in use
By analyzing driver behavior and experience
By reviewing past claims history for the company
The correct answer is: By knowing where the insured vehicles are stored when not in use
The correct choice highlights the importance of understanding where the insured vehicles are stored when they are not in use. This location can significantly impact the risk exposure associated with the fleet of autos. For instance, if the vehicles are stored in a high-crime area or in locations that are prone to natural disasters, the concentration of values may pose a higher risk of loss. Underwriters are concerned with the overall risk profile of the fleet, and knowing the storage locations allows them to assess hazards that could lead to claims. In the context of fleet management, understanding the physical locations of the vehicles can inform underwriting decisions and risk mitigation strategies. This information may also assist in determining appropriate insurance premiums based on the risk associated with specific geographic areas. While analyzing driver behavior and experience, assessing insurance coverage details, and reviewing past claims history are all relevant components of a comprehensive risk assessment, the specific concentration of values related to the storage locations uniquely address the concern of risk accumulation that arises from geographic clustering in relation to the fleet’s exposure.