Regional Rating Class (Regionalklasse)

Concept

Regional rating class is a rating factor used in motor insurance under which a vehicle owner’s registration district is classified into one of several risk classes based on the loss frequency and loss severity historically observed in that district. Regional rating classes are typically determined separately for third-party liability, comprehensive, and partial comprehensive cover, since the relevant loss causes differ between these coverage types.

Determining the Classification

The classification is based on a statistical evaluation of the loss experience of all vehicles registered in a given district over a multi-year observation period, taking into account factors such as traffic density, accident frequency, theft risk, and regional weather conditions (such as hail or windstorm losses); the classification is reviewed periodically, generally annually, and adjusted where necessary.

Relevance for the Premium

Alongside the policyholder’s individual no-claims class, regional rating class is one of the most important collective rating factors in motor insurance, as it allows the insurer to reflect regional differences in expected loss costs in the premium on a risk-adequate basis, without having to rely on individual characteristics of the specific policyholder.