Washington State Insurance Practice Exam

Which rating method adjusts the insurance premium based on past loss experience of the insured?

1. Class Rating

2. Experience Rating

3. Judgment Rating

4. Schedule Rating

The correct answer is: Experience Rating

Experience Rating adjusts the insurance premium based on the past loss experience of the insured. This method takes into account the specific claims history of the policyholder, which allows for a more personalized premium calculation. Class Rating involves the use of predetermined rates based on specific classifications. Judgment Rating is based on the underwriter's judgment rather than objective data. Schedule Rating involves adjusting the premium based on factors outlined in a schedule provided by the insurance company.