Class Rating

What Does Class Rating Mean?

A class rating is a method used in insurance to group individuals with similar risk profiles, allowing insurers to assign a rate that appropriately corresponds to their level of risk.

Insuranceopedia Explains Class Rating

Insurers can classify individuals or properties using class ratings. For example, a house may be assigned a class based on its location and the natural hazards that frequently affect that area. This helps explain why two houses with similar structures and values might have different premiums for the same amount of coverage. Similarly, an individual’s health or life insurance premiums may be higher than average due to existing health issues or lifestyle choices.