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The incorporation of demographic risks in the territory definitions gives insurers clearer picture on premium rate-making. (Shutterstock) The incorporation of demographic risks in the territory definitions gives insurers a clearer picture on premium rate-making. (Photo: Shutterstock)

Most personal auto and home insurance carriers use geographic risk as a primary rating variable for calculating policy premium rates. This ensures that customers living in the same neighborhood pay similar insurance premiums, as they are likely to experience the same geographical risks to their automobiles and property.

Some common geographically shared risks include:

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