U1-L3-P1
Insurance risks are broadly classified as preferred, standard, substandard, and uninsurable. Insurers generally have several subcategories within each group refer to as tiers.
Preferred risks: Preferred risks have risk characteristics which are better than the average for a particular group of insureds.
Standard risks: Standard risks have risk characteristics that are average for the insured group.
Substandard risks: Substandard risks have risk characteristics which are worse than the average for the insured group.
Uninsured risks: Uninsured risks have risk characteristics that a particular insurer would not consider underwriting. Insurers normally determine the maximum level of risk they would underwrite and risks with greater than the insurer acceptable standards are rejected.
The following question is part of this page, answer it and then click below to check for your response:
What risk category has risk characteristics that are worse than the average for the risk group?
