CAS Practice Exam 2026 – Complete Study Guide

When assessing vehicle characteristics, Claire should focus on factors that increase or decrease the potential for loss. This approach is fundamental in underwriting, as understanding these factors allows for a more accurate evaluation of risk associated with insuring a vehicle.

In the context of underwriting, vehicle characteristics that influence loss potential include the make and model of the vehicle, safety features, historical claims data for similar vehicles, and the likelihood of theft or accidents based on those characteristics. For instance, certain vehicles may have higher theft rates, while others may be associated with fewer claims due to better safety ratings and features. By analyzing these elements, an underwriter can make informed decisions regarding coverage, premium setting, and risk management strategies, ultimately ensuring the profitability and sustainability of the insurance program.

The other options, while relevant to the overall understanding of vehicle insurance and underwriting, do not directly address the specific characteristic of assessing risk related to potential losses as effectively as the identified correct choice. For example, awareness of vehicle insurance requirements is important for compliance and understanding the legal aspects, but it does not directly inform the risk associated with specific vehicle characteristics. Similarly, knowing the factors influencing the development of new vehicles could be useful in understanding market trends, but it wouldn’t provide immediate insights into assessing loss potential