A strip-mall includes eight identical-sized retail units.All of the units were built at the same time and each has an identical sprinkler system.Unit number two is a dry cleaning business.Unit number three is a bar and grill.Unit number four is a dress shop.The owners of these three units are all insured by the same insurance company,but the property insurance premiums vary significantly.Which of the following rating factors best explains the difference in premiums?
A)exposure
B)protection
C)construction
D)occupancy

Question

Quizplus · Accepted Answer

The primary rating factor that differentiates the premiums in this scenario is occupancy. The dry cleaning business, bar and grill, and dress shop are all different types of businesses with different levels of risk associated with their operations. The insurance company would have different rates for each business based on their occupancy classification.

A Strip-Mall Includes Eight Identical-Sized Retail Units