Market & Policy · Insurance Term
Rate
Definition
A rate is the price of insurance per unit of exposure — for example, a dollar amount per $100 of building value or per $1,000 of sales. The insurer multiplies the rate by your exposure to calculate the premium.
In Plain English
Property rates are commonly stated per $100 of insured value. Liability rates may be per $1,000 of sales, per unit or per square foot. The rate reflects expected losses, expenses and the insurer's view of your specific risk.
Underwriting adjusts the base rate for things like construction, fire protection and loss history. Schedule rating may add credits or debits within set limits, and hard market or soft market conditions push rates up or down across the industry.
Your premium can change because the rate changed, because your exposure changed (such as higher building values), or both.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: a building's insured value rises from $2 million to $2.4 million after a revaluation. Even if the rate stays at $0.50 per $100, the premium rises from $10,000 to $12,000.
What to Watch For
- Ask whether a premium increase came from a rate change, a value change or both.
- Compare rates across years using the same values to spot real changes.
- Ask what credits are available for upgrades like a new roof or sprinklers.
Last updated October 14, 2026 · Primesure editorial team · How We Write