Experience Rating
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums paid are related to actual claims and expense experience expected for that specific group. In prospective rating, the past three years loss experience of the insured is the basis for the premium calculation for the current year of coverage. In retrospective rating, the current premium rate for the current period of time is modified at the close of that period to reflect actual loss experience. The premium actually paid then can be adjusted, subject to a pre-agreed minimum and maximum rate.
Popular Insurance Terms
Same as term Builders Risks Forms: types of contracts that insure building contractors for damage to property under construction. The completed value form requires a 100% coinsurance ...
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Liability insurance that provides coverage for the insured in the event the insured's negligent acts and/or omissions result in libel, slander, invasion of privacy, or false arrest suit. ...
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