18.1.1 Classifying Risks
Classifying risks is more than deciding "yes" or "no" - to what degree of risk will the insurer subject itself? Here we'll take a closer look at the three most important factors.
- Physical Condition
- Moral Hazards
- Occupation
Premium Rates
Based upon a combination of these factors, the underwriter determines if any coverage at all will be supplied and, if so, the rate at which the premiums will be set.
- Preferred Rate - Lower premium (better than average risk)
- Standard Rate - Normal premium (standard terms and rates)
- Substandard Rate - Higher premium (higher than average risk)
- Uninsurable - Decline coverage altogether
