Claims Adjuster Academy Chapter 3 Demo

These include:

• Inspection services • Government bureaus, such as the Bureau of Motor Vehicles • Insurance industry bureaus, such as the Automated Property Loss Underwriting System • Financial information services, such as Standard And Poor’s • Previous insurers • The company’s own claim files Rates Insurance premiums are derived from insurance rates. A rate is the price of insurance for each unit of exposure. Most state insurance laws prohibit rates which are excessive, or inadequate, or unfairly discriminatory. Types of Rates If the insurance company agrees to issue a policy, a premium must be determined. These are the basic ways in which a premium can be computed. • Judgment rating • Manual rating (Class rating) • Merit rating • Experience rating • Retrospective rating • Scheduled rating Judgment Rating- The oldest form of computing rates is called judgment rating. The premium is determined by considering the individual risk. Manual rating (class rating)- The company’s rates for a particular state or area are obtained by consulting a manual, which is usually stored on a computer. Calculating a Manual Rate

FORMULA: RATE PER UNIT X NUMBER OF UNITS = PREMIUM