How Insurance Rates are Determined

Both a retail agent/broker and a wholesale broker, or a company or an organization and prospective purchaser of insurance should have a basic understanding of the method an insurance company uses to determine the premium that will be paid for insurance.

A knowledge of rating factors will enable an agent/broker to provide insurance premium estimates and also negotiate both coverage and pricing with insurance companies.

Insurance Rates

Insurance companies that are licensed to underwrite insurance must file policy forms and premium rates in each state for approval. There may be differences in both forms and rate filings for a particular state. Excess and surplus companies are not required to file forms and rates. In addition, each insurance company may file a different policy form and rates for its own product. Policies and rate filings may also change periodically. Therefore, not every premium calculation will be the same. However, many underwriting assumptions and data are similar for pricing purposes.

Insurance Data Logic provides information that allows a user to view the method an underwriter uses to quote a submission based on evaluation of an application and supporting data. Obtain a better understanding of the different rating factors assigned to limits, deductibles, territory, business characteristics, claim history, management and various risk parameters associated with an insurance product – all used in coverage determination and premium Calculation.

Premium Estimator Products

Insurance agents and brokers can help insureds reach better decisions purchasing insurance by making Insurance Premium Estimator available to clients. It is another service to offer to both existing and potential insureds. Your competition provides Insurance Premium Estimator – you should too!

Always read each policy carefully since terms and conditions along with definitions and exclusions may vary or change and can affect premium, coverage and claim payment.

See Cyber Insurance Premium Estimator

A subscription includes both our manual and online premium calculation service with ten insurance products. Each month a new insurance product is added. A subscriber may also co-brand our service for distribution to its clients at no additional cost. As an introduction, review our Cyber Insurance product service for FREE.

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