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
Property insurance coverage available to businesses that pays the established market (sales) value of products that are damaged rather than simply their lower (production) cost. This fills ...
Contract that may or may not provide more in benefits than premiums paid. For example, with only one premium payment on a property policy an insured can receive hundreds of thousands of ...
Membership organization of insurance companies that write workers compensation insurance. The organization collects statistics on the frequency and severity of job-related injuries to ...
Sum total of all assets owned by the decedent to include personal property, real property, and trust property. ...
Probability of one's living to a specific age according to a particular mortality table. Life expectancy is the beginning point in calculating the pure cost of life insurance and annuities ...
Value of loss resulting from loss of use of property. For example, a fire damages the structure of business premises and the business loses customer income until it can reopen. The loss in ...
Coverage when business records are destroyed by an insured peril and the business cannot collect money owed. The policy covers these uncollectible sums plus the expense of record ...
Same as term Basic Limit of Liability: required minimum amounts of coverage that an insurance company will underwrite. For example, for auto liability coverage the minimum that many ...
Bodily or emotional injury resulting from physical or mental wound or shock. A traumatic injury is caused by something outside the person's body as opposed to a sickness or a disease. An ...
Have a question or comment?
We're here to help.