What type of insurance policy is most likely to use class rating?

Class rating is a method used primarily in property and casualty insurance policies. This approach groups similar risks together based on characteristics such as the nature of the risk, geographic location, and historical loss data. Insurance providers analyze these similarities to set premiums that reflect the average risk within a class, making it easier to provide coverage to a large group of insured individuals or entities that share comparable risk profiles.

In contrast, life insurance, health insurance, and disability insurance often rely on individual assessments rather than class ratings. These types of policies usually consider specific individual factors, such as health status, lifestyle, age, and other underwriting criteria, to determine the premiums. Therefore, property and casualty insurance types stand out as the most suitable context for class rating, as this method efficiently manages and prices risk across many policyholders with similar attributes.