What Is Rated Policy? Definition

Why it matters

The policy is otherwise like a standard one, with the same coverage. The rating may come as a table rating or a flat extra. Ask whether the carrier will review it later and what proof is needed. Comparing carriers can lower the cost. Ratings differ by carrier and by state, so compare offers from more than one company before you decide.

Source: naic.org

Related terms

Table Rating: A table rating is a premium increase for higher than standard risk, shown with letters or numbers. Each step usually adds about 25 percent to the standard rate, though carriers differ.
Flat Extra: A flat extra is an added charge per $1,000 of coverage for a specific risk, such as a hazardous job or hobby. It is billed on top of the regular premium.
Substandard (Table Rating): Substandard, or table rated, means an applicant has higher than average risk. The carrier offers coverage at an increased premium, usually shown as a percentage above the standard rate.
Underwriting Class: An underwriting class is the group a carrier places an applicant in after review, such as preferred or standard. Each class has its own premium rate, with healthier groups paying less.
Premium: A premium is the amount you pay to keep an insurance policy active. You can pay it monthly, quarterly, semiannually, or annually, depending on the carrier.

All 241 terms

Why it matters

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