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📄 '''Rated policy''' is an [[Definition:Insurance | insurance]] [[Definition:Policy | policy]] issued at a [[Definition:Premium | premium]] higher than the standard rate because the [[Definition:Insured | insured]] presents a level of [[Definition:Risk | risk]] that exceeds the assumptions built into the base [[Definition:Rating | rating]] class. In [[Definition:Life insurance | life insurance]] and [[Definition:Health insurance | health insurance]], this typically reflects an applicant's medical history, hazardous occupation, or lifestyle factors identified during [[Definition:Underwriting | underwriting]]. In [[Definition:Property insurance | property]] and [[Definition:Casualty insurance | casualty]] lines, a rated policy might result from adverse [[Definition:Loss history | loss history]], unusual construction, or [[Definition:Exposure | exposures]] that standard [[Definition:Rating | rating]] tables do not adequately price. Rather than declining the risk outright, the [[Definition:Insurance carrier | carrier]] accepts it at a surcharge — often expressed as a percentage above the standard rate or as a flat additional [[Definition:Premium | premium]].

⚙️ The process of issuing a rated policy begins during the [[Definition:Underwriting | underwriting]] evaluation. When an [[Definition:Underwriter | underwriter]] identifies substandard characteristics — say, a commercial building with outdated electrical systems or a life insurance applicant with a controlled chronic condition — they apply a [[Definition:Rating modifier | rating modifier]] or [[Definition:Substandard rating | substandard rating]] that adjusts the premium upward. In life insurance, rating tables (often labeled A through J or numerically) correspond to increasing levels of extra [[Definition:Mortality risk | mortality]] risk, each adding a defined percentage to the base premium. In [[Definition:Commercial lines | commercial lines]], the surcharge may be calculated through a combination of [[Definition:Schedule rating | schedule rating]] credits and debits or by applying experience-based [[Definition:Loss cost modifier | loss cost modifiers]]. The rated terms are disclosed in the [[Definition:Declarations page | declarations page]] and reflected throughout the policy documentation.

🎯 For the insurer, rated policies represent a disciplined middle ground between accepting risk at inadequate pricing and turning it away entirely. They expand the pool of insurable risks and capture [[Definition:Premium | premium]] revenue that would otherwise be lost to declinations. For [[Definition:Policyholder | policyholders]], a rated policy — while more expensive — provides access to coverage that might not be available at all in the [[Definition:Standard market | standard market]], preventing gaps that could prove financially catastrophic. [[Definition:Broker | Brokers]] play a key role in managing client expectations around rated policies, explaining the basis for the surcharge and, where possible, identifying [[Definition:Risk mitigation | risk improvement]] actions that could qualify the insured for standard rates at the next [[Definition:Renewal | renewal]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Rating modifier]]
* [[Definition:Substandard risk]]
* [[Definition:Schedule rating]]
* [[Definition:Underwriting]]
* [[Definition:Standard market]]
* [[Definition:Experience rating]]
{{Div col end}}

Definition:Rated policy - Revision history

PlumBot: Bot: Creating new article from JSON