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RATING HINTS

This area is a summary of what information you will need to know about the applicant BEFORE going into the actual manual to begin to rate a risk.
 

Rating of Commercial Auto

This section is a guideline to help you determine how to properly rate a commercial auto application. Please keep in mind two very important details:
  1. All risks applying to the Plan must be headquartered in the State of Wisconsin.
  2. The application must encompass ALL owned vehicles. We do not write just a portion of any risk.
To determine the premium, you must know the following:
  • vehicle/trailer information
  • requested limits
  • type of operations
  • what the applicant will be hauling
  • loss run information
  • number of years in business
  • the operations of the business will determine the classification, not vehicle type.
First, look at the operations of the business. This will indicate the classification, not necessarily the type of vehicle(s).

Rating Example

You have 3 private passenger autos which are used as taxis. Go to the public auto section of the manual rather than the private passenger business use section.

Once the proper section for the application is found, determine how the vehicles should be classified. You will also need to determine any primary and secondary rating classifications. In some instances you will need to know if you should use fleet vs. non-fleet classes or rates. A fleet is considered 5 or more vehicles and non-fleet is less that 5 vehicles.

Next, find the rate section or "R" pages in the back of the manual. Find the correct chart for the business operations. Use the territory and limits which are requested to find the base vehicle premium. Multiply the base vehicle premium by the rating factors you obtained previously (primary + secondary rating factors which are added together). This becomes the "new" base vehicle rate. Multiply the number of vehicles or power units by the "new" base rate.

Finally, you will need to evaluate if the policy will be Experience Rated (Rule 54) or Merited Rated (Rule 55).
EXPERIENCE RATING is for risks that have 5 or more vehicles/motor units or 3 or more public autos.
MERIT RATINGS applied to risks who are not eligible for experience rating or have been in business less than 9 months.

Apply either the Experience or Merit rating factor to the total policy base premium.
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