Rate Adequacy

Whether a rate is high enough to cover expected losses and expenses and still leave a reasonable profit. Inadequate rates are how insurers get into trouble.

This is a friendly general explanation, not legal or policy language. Exact coverage depends on your policy, carrier, and state. 🤝

Written and reviewed by the We Insure Things team — licensed independent insurance agents. Last reviewed July 23, 2026. Questions? Ask a licensed agent.