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Rates and Markets terms
The numbers that move Homeowners Insurance.
A-PLUS property reportVerisk's claims history report on a property or applicant, a counterpart to the LexisNexis database that insurers use to check past losses.CLUE reportA LexisNexis report of the auto and property claims tied to a person and an address over roughly seven years, which insurers pull when underwriting.Construction classThe category an insurer assigns a house by its walls and structure, such as frame, masonry veneer, masonry or fire-resistive, used for rating and rebuild cost.Fire protection classThe 1 to 10 number on a home insurance quote that reflects how close and well equipped the nearest fire department and water source are.Insurance scoreA number built from your credit report data that insurers use to predict how likely you are to file claims, and therefore how to price your policy.Loss historyThe record of insurance claims tied to you and to your property over the past several years, which underwriters use to judge risk and set price.Public Protection Classification (PPC)A 1 to 10 grade, assigned by Verisk's ISO unit, of how well a community's fire department, water supply and dispatch can fight a house fire.Rating territoryA geographic area, often a ZIP code or county, that an insurer prices as a unit because losses from weather, fire and theft differ from place to place.Risk Rating 2.0FEMA's current method of pricing NFIP flood policies by each home's own flood risk and rebuilding cost rather than mainly by flood zone and elevation.UnderwritingHow an insurer evaluates a home and its owner, decides whether to offer coverage and on what terms, and sets the price.Underwriting guidelinesAn insurer's internal rules for which homes it will write, which it will decline, and what conditions, limits or surcharges apply to the ones it accepts.Catastrophe modelSoftware that simulates thousands of possible hurricanes, quakes, wildfires and storms to estimate the losses an insurer's policies could suffer.Probable maximum lossA modeled estimate of how big an insurer's loss from a single severe catastrophe could be, stated at a probability such as a 1-in-100-year event.Residual marketThe state-created plans and pools that cover property owners the private market declines, as opposed to coverage insurers sell by choice.Catastrophe bondA security sold to investors that pays interest, but whose principal goes to the insurer that sponsored it if a defined disaster occurs, serving as reinsurance.ReinsuranceInsurance that an insurance company buys from other companies, which reimburse part of its claim payments, especially after a large disaster.Reinsurance towerThe stack of reinsurance layers an insurer buys one above another, each starting where the layer below ends, to cover progressively larger catastrophe losses.