When an auto or homeowners insurer changes prices, the increase is not governed by one national approval rule. State insurance laws determine how rates are filed, reviewed and challenged.
The NAIC’s rate-filing resources group common property/casualty systems into categories including prior approval, file-and-use, use-and-file, no-file/open competition and flex rating. The exact definitions and deadlines still depend on each state’s statutes and regulations.
The main rate-filing systems
| Method | General concept | What it means operationally |
|---|---|---|
| Prior approval | Rate must generally be filed and approved before use | Regulator reviews before implementation, subject to state timing rules |
| File and use | Rate is filed before it becomes effective | Insurer may use the rate after required filing/waiting conditions are met |
| Use and file | Rate can become effective before filing | Insurer files within a specified period after use begins |
| Flex rating | Changes within a permitted band may receive streamlined treatment | Larger changes can trigger prior approval or additional review |
| Open competition / no file | Market competition plays a larger role | Formal rate filing may be reduced or not required for certain lines, though other regulatory standards still apply |
What does a regulator review?
State rating laws commonly require rates not to be excessive, inadequate or unfairly discriminatory. Regulators may review actuarial support, loss experience, trend assumptions, catastrophe provisions, expenses, reinsurance, classification plans and other rating factors depending on the line and state.
Why the same insurer can change rates differently by state
A national carrier can face different approval methods, filing deadlines and evidentiary standards in each jurisdiction. One state may require prior approval for personal auto, while another may permit a different filing method. Commercial lines can also receive different treatment from personal lines within the same state.
Does regulatory approval mean every customer’s premium rises by the same amount?
No. A filing often addresses an overall rate-level change or changes to rating factors. The effect on an individual policy can differ based on territory, vehicle, home characteristics, coverage choices, limits, deductibles, discounts and other approved factors.
Why insurers file for rate increases
- Higher claim frequency or severity.
- Repair, medical, construction or labor-cost inflation.
- Catastrophe experience and changing modeled risk.
- Reinsurance cost and availability.
- Litigation, fraud or claims-handling expenses.
- Changes in portfolio mix or underwriting experience.
Can regulators reject a rate filing?
Depending on the state’s legal framework, regulators can request additional information, object to unsupported assumptions, require modifications or disapprove rates that do not meet statutory standards. In other systems, competition is relied upon more heavily, but insurers remain subject to applicable rating laws and market-conduct oversight.
Where consumers can find filing information
Many state departments of insurance provide public filing-search tools, and states may use systems such as SERFF for regulatory filings. Availability of supporting exhibits and confidentiality treatment varies. Consumers should start with their state insurance department.
Frequently asked questions
Does every insurance rate increase require prior approval?
No. Filing method depends on the state, line of insurance and size/type of change.
Is file-and-use the same as automatic approval?
No. The insurer files before use, but regulators can retain review authority under state law.
What is a flex-rating system?
It generally allows streamlined treatment for changes within a defined range, while larger changes may receive stricter review.
Why do homeowners and auto rates have different rules?
States can establish different regulatory methods by line of business because the risks, markets and public-policy concerns differ.
Sources & further reading
Reviewed October 2, 2026. Rate-filing methods, waiting periods and review standards are state- and line-specific; check the current insurance department rules for a particular filing.
