Schedule Rating

What Does Schedule Rating Mean?

Schedule rating is the practice of adjusting a policyholder’s premium, either by reducing or increasing it, based on specific conditions or factors. These conditions are related to the level of risk the insurer assumes.

Insuranceopedia Explains Schedule Rating

States grant insurers the authority to include schedule rating as a feature of their insurance products. This practice allows insurance companies and their underwriters to apply either credits (discounts) or debits (surcharges) to the insured’s premiums based on specific conditions. Schedule rating shows up most often in commercial coverage, where it directly affects how business insurance premiums are calculated for any given account.

For example, an insurer might offer a discount on property insurance premiums if the insured installs certain security devices in their home or on their property. That same logic is why installing smart-home devices can lower your home insurance premium, since carriers treat monitored alarms and similar safety equipment as factors that reduce expected losses.