Which rating method takes into account the insured's claim history?

Experience rating is specifically designed to take into account the insured's claim history when determining premiums. This method assesses the insured's past claims experience compared to that of similar risks. If the insured has an extensive claim history with more claims or higher losses than average, this can result in higher premiums under experience rating. Conversely, if the insured has a good claims history with fewer or lower losses, they may benefit from lower premiums.

This rating method is particularly prominent in certain types of insurance, such as workers' compensation and liability insurance, where the frequency and severity of claims can vary significantly based on the individual risk profile of the insured. By considering the past claims history, insurers can more accurately tailor premiums to reflect the risk that the insured represents.

In contrast, other methods such as judgment rating and manual rating rely on more generalized data and do not personalize the premiums based on specific claims history. The standard rating method follows set classifications and rate schedules, without adjustments for individual performance. Thus, experience rating stands out as the method that directly links claims history to premium calculations.