Territorial Grouping Of Risks
Method of classifying risks to establish equitable rates. In many property and liability insurance lines, the location of an insured has a significant impact on the loss experience. For example, in automobile insurance the chance of a policy holder sustaining a loss is much greater in New York City than in rural Iowa. In lines like workers compensation, insurers may consider the attitude of the state courts and its impact on the cost of claims in that state. The insurer's task is to define a territorial grouping that has an exposure that is either smaller or greater than the standard, yet the group must be large enough to provide significant loss experience for rate making.
Popular Insurance Terms
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Person who has the responsibility for examining the risk to determine whether or not to insure it. ...
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The term pro rata comes from Latin and translates to in proportion, proportionally, the proportion of, proportionately determined, or according to a specific rate. It is often used in legal ...
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