Become a Smarter Consumer of Commercial Insurance in Atlanta
by R&I Consultants
At Risk & Insurance Consultants, we feel that it is our job to give you the knowledge to become a smarter consumer of commercial insurance in Atlanta. Today, we will focus on a couple of key terms in the business—rates and credits.
You may hear the term, rate(s), multiple times when discussing insurance with your agent. Rate is a unit of cost that is multiplied by an exposure base to determine an insurance premium. In other words, an insurance rate is the amount of money necessary to cover losses, cover expenses and provide a profit to the insurer for a single unit of exposure.
Rates are measured by things such as payroll, square footage, sales, receipts or units. Inherent risk and an insured’s loss history also factors into this rate. The frequency and/or severity of losses can be an indication of poor risk management or loss control practices of the insured. Therefore, rates will be higher.
Credits, on the other hand, are discounts applied to standard rates after loss experience is factored. A discount credit can be applied for high volume premium or for good loss experience. Credits are also available for training your employees in loss control, safety and other risk management programs.
Be sure to get all of the credits available. You can do so by telling your agent about your business operations and loss history. Then, your agent can find the most beneficial rate for you.
Now, the next time you talk with your agent, you will be a smarter consumer! For more information about insurance, be sure to follow Risk & Insurance Consultants on Facebook.