Schedule Rating
Definition of "Schedule rating"
Method of pricing property and liability insurance. It uses charges and credits to modify a class rate based on the special characteristics of the risk. Insurers have been able to develop a schedule of rates because experience has shown a direct relationship between certain physical characteristics and the possibility of loss. For example, for fire insurance, the underwriter might make an additional charge above the standard rate for the class if a building contains a flammable liquid. A credit may be given if it has a sprinkler system. In automobile insurance, a credit might be given for driver education. In life insurance, credit is usually given for a nonsmoker. Schedule rating is commonly used for fire, automobile and workers compensation insurance.
Popular Insurance Terms
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Presence of other contract (s) covering the same conditions. When more than one policy covers the exposure, each policy will pay an equal share of the loss. ...
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Specific powers that a prospective insured believes the insurance company has granted to its agent. For example, if the insurance company has furnished the agent a rate book, application ...
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