What is generally true about the premiums for special class risks compared to normal risks?

When it comes to special class risks in insurance, it is generally true that the premiums are usually higher compared to normal risks. Special class risks refer to individuals who present a greater likelihood of making a claim or experiencing an adverse event due to various factors such as health conditions, occupational hazards, or lifestyle choices that increase risk.

Insurance companies assess these risks through underwriting, which involves evaluating the likelihood of claims based on the insured's profile. Because special class risks are expected to file more claims or have higher costs associated with their insurance, insurers charge higher premiums to cover the increased potential for loss.

This principle ensures that the premiums collected from policyholders appropriately reflect the level of risk the insurer is assuming, allowing the company to remain financially viable while providing coverage for higher-risk individuals.