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Old 01-11-2018, 10:32 PM
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Default Same territory factor for an entire urban area?

A coworker told me about a competitor he reviewed, and for one semi-large city, they had the same territory factor being charged for the personal line for the entire city. I couldn’t think of a good reason to do that, short of rating elsewhere in your class plan to pick up the signal, or trying to obfuscate when others look at your filings.. Is there a good reason to rate an entire area with the same factor?

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Old 01-12-2018, 12:00 AM
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Originally Posted by Gareth Keenan View Post
A coworker told me about a competitor he reviewed, and for one semi-large city, they had the same territory factor being charged for the personal line for the entire city. I couldn’t think of a good reason to do that, short of rating elsewhere in your class plan to pick up the signal, or trying to obfuscate when others look at your filings.. Is there a good reason to rate an entire area with the same factor?

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Gareth Keenan
Regulatory restriction.
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Old 01-12-2018, 08:49 AM
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Regulatory restriction.


I know for a fact that Connecticut does this. You have to apply a single territory factor to an entire municipality; no breaking it up into neighborhoods or zip codes is allowed. I'm not sure how prevalent this is in other states.
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Old 01-12-2018, 09:47 AM
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I know for a fact that Connecticut does this. You have to apply a single territory factor to an entire municipality; no breaking it up into neighborhoods or zip codes is allowed. I'm not sure how prevalent this is in other states.
At one point, Ohio did this too. They still might, I don't often have to deal with Ohio rates in my current position.
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Old 01-12-2018, 11:34 AM
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Except in this instance, only one peril has the same territory factor. Others do vary inside the city
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Old 01-12-2018, 11:43 AM
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Originally Posted by Gareth Keenan View Post
A coworker told me about a competitor he reviewed, and for one semi-large city, they had the same territory factor being charged for the personal line for the entire city. I couldn’t think of a good reason to do that, short of rating elsewhere in your class plan to pick up the signal, or trying to obfuscate when others look at your filings.. Is there a good reason to rate an entire area with the same factor?

Cheers,

Gareth Keenan
There are competitors out there that only have a few different factors for entire states for some perils. My opinion is, as you mentioned, there is further refinement elsewhere that makes territory factor rating less significant.
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Old 01-12-2018, 02:37 PM
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Except in this instance, only one peril has the same territory factor. Others do vary inside the city
Illinois has a rule that Bodily Injury territory factors must be the same within the city of Chicago. I could see a similar rule being in place elsewhere for a different line.
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Old 01-12-2018, 03:33 PM
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so what product? what peril? i mean, hail doesn't really need split by very much. Fire, sure, but a lot of companies use Protection class from ISO. theft could certainly get to a lower level, but the actual $ cost of theft is usually pretty low, unless you move over to Auto, i was mostly thinking Home. do i need to keep going?
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