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
Policy provision designed to restore an insured to his or her original financial position after a loss. The insured should neither profit nor be put at a monetary disadvantage by incurring ...
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Sum of insurance provided by a policy at death or maturity. ...
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Deferred annuity under which one premium payment is made and the annuity is paid up (no further premium payments are required). ...
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