Insurance Terms Defined: Property Loss Exposure

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 the home, the crime rate of the surrounding area or just the age of the home itself.

You must understand in order to understand insurance that the basic idea of insurance is to gauge the risk of insuring someone or something against the premium paid by the insured.  An insurance company must be able to gauge how much they can afford to pay against how much they can ask to charge their insured customers.