Which type of rating applies to individuals with similar exposures in personal lines of insurance?

Class rating is the correct answer as it applies to individuals with similar exposures in personal lines of insurance. This method groups insureds into classes based on shared characteristics or risk factors, allowing insurance companies to assess and price policies more efficiently. By grouping individuals with similar risks, insurers can average out losses across a larger pool and determine a fair premium for that class, reflecting the typical claim experiences of all members within it.

This approach is particularly effective in personal lines, such as auto or homeowners insurance, where many policyholders have comparable risks. It simplifies the underwriting process and ensures that premiums are proportionate to the risk level associated with that class.

In contrast, merit rating considers individual risk factors but is more frequently applied in commercial lines or non-standard risks. Individual rating evaluates the policyholder’s unique risk profile without relying on group characteristics, while retrospective rating adjusts premiums based on the underwriting performance of the insured over a specific period, also commonly used in commercial insurance settings rather than personal lines.