In insurance, Rate refers to the price per unit of insurance coverage, typically expressed as a cost per unit of exposure, such as per $1,000 of property value or per $100,000 of liability coverage. Rates are determined by insurance companies based on various factors that assess the level of risk associated with providing coverage to the insured party. Key factors influencing insurance rates include the insured’s risk profile, which may include age, health status, occupation, location, and claims history.

Rates also reflect the insurer’s underwriting criteria, which assess the likelihood of a loss occurring and the potential severity of that loss. Insurance rates are calculated by applying the rate to the units of exposure covered by the policy. For example, in property insurance, the rate might be applied to the insured property’s value to determine the annual premium. In liability insurance, rates are often based on the coverage limit selected by the policyholder.