What does above average exposure typically imply in underwriting?

In underwriting, "above average exposure" typically indicates that a policyholder presents a greater risk than the standard level expected for a certain type of insurance. This situation arises when an individual or entity has factors that make them more susceptible to loss, which could be due to various reasons such as health issues in life insurance, high-risk activities in auto insurance, or other risk-increasing characteristics.

When underwriting identifies above average exposure, the insurer often adjusts the policy terms to account for the increased risk. This adjustment usually manifests in a higher premium or additional ratings applied to the policy. Hence, being classified as "rated" means that the applicant is recognized as having above average risk, and their insurance premium reflects that elevated risk level. This classification ensures that the insurer can adequately manage the potential losses associated with this increased level of risk, making "rated" the appropriate understanding for above average exposure in this context.