All About Auto Insurance Coverage
31
Mar
Risk: the uncertainty about outcomes, some of which can be either negative or positive. If you are simply trying to understand why insurance is necessary this is the most basic term that could help you do so. Insurance, in its most basic terms, is the financial approach to handling risk and its possible effects. The [...]
30
Mar
Liability Loss: A claim for monetary damages because of an injury to another party or damage to another party’s property. Any time that you have caused or are being accused of causing injury to another party or damage to their property you are at risk of having a liability loss claimed against you. This is [...]
29
Mar
Liability Loss Exposure: any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party. A liability loss exposure is what your auto insurance or homeowners insurance company will use to quantify your risk as an insured customer. The more [...]
28
Mar
Net Income Loss: an indirect loss caused by a reduction in revenue, an increase in expenses, or both during a given time period. Once you have been able to determine your net income, you can then determine your net income loss for a given period by doing more addition or subtraction. This is the exact [...]
27
Mar
Net Income: revenue minus expenses and taxes during a given time period. All insurance companies, like most companies, must keep good records of the income that is produced by the company to budget and profit well. When determining your business income or your personal income you need to determine what your actual net income is [...]
26
Mar
Personal Property: all tangible or intangible property that is not real property. Personal property coverage on your insurance policy will cover the property that you own inside your home that is not the actual structure or structures on it. This could be things of material value or things of emotional or sentimental value, as long [...]
25
Mar
Real Property: land, buildings and other structures attached to the land or embedded in it. When you sign up for homeowners insurance to protect the investment that you have made in your home you get two different types of coverage on your policy. One covers the actual structures on your land and the land itself, [...]
24
Mar
Property Loss Exposure: any condition or situation that presents the possibility that a property loss will happen. As you have already learned about auto insurance companies, property insurance companies use the same principles to gauge how much an individual’s premiums should be. A property loss exposure could be the lack of an alarm system on [...]
23
Mar
Exposure Units: A measure of the loss exposure assumed by the insurer, used in pricing insurance. As you know from the definition of loss exposure, your auto insurance company will try to determine how much to charge you for insurance based on a set of criteria you have entered. For every loss exposure assumed by [...]
22
Mar
Law of Large Numbers: a mathematical principle stating that as the number of similar but independent exposure units increases, the relative accuracy of predictions about future outcomes (losses) based on these exposure units also increases. This is a mathematical principle that your auto insurance company uses to help them determine how many losses they may [...]
21
Mar
Loss Exposure: any condition or situation that presents the possibility of a loss. This is the information that any type of insurance company relies on to make decisions based on your current situation. For instance, an auto insurance company will take all of the information you have entered in your application and apply all of [...]
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