What is characteristic of manual rating in insurance?

Manual rating in insurance refers to the approach of setting rates using standardized criteria that apply across a wide range of policies. The method involves predetermined rate tables published by the insurance company or industry associations, which take into account various factors such as the type of coverage, geographical location, and general risk factors. This structure allows insurers to offer consistency and predictability in pricing, making it easier for agents and consumers to understand premium costs.

The key aspect of manual rating is that it relies on broad categories rather than assessing individual risks in detail. This results in rates that are generally applicable to many insureds rather than specifically tailored to unique circumstances or personal underwriting evaluations. As such, this system contrasts with more individualized pricing models that may depend on unique risk assessments or extensive financial analyses that adapt rates closely to the insured's specific situation.