Final answer:
Insurers prefer written and signed applications for policies to reduce costs, verify honesty, and establish usage parameters.
Explanation:
An insurer would prefer a written and signed application prior to the issuance of a policy because:
- Minimizes the cost incurred by the insured: By having accurate information upfront, insurers can assess risks better and price policies accordingly.
- Helps to prove an alleged misrepresentation: Written applications serve as legal documentation and can be used to verify information provided by the applicant, ensuring honesty in the process.
- Establishes the use of the auto: Clear information in the application helps define the usage of the insured vehicle, determining the appropriate coverage.
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