Insurance Basics
This is protection against possible financial loss.
What is insurance?
This type of insurance protects your residence and associated financial risks.
What is homeowners insurance?
The set amount a policyholder must pay before insurance covers a loss.
What is a deductible?
This type of risk offers no chance for gain, only the possibility of loss.
What is pure risk?
This insurance applies when you damage the property of others with your vehicle.
What is property damage liability?
The fee a policyholder pays regularly for insurance coverage.
What is a premium?
Insurance that covers damage to your vehicle after an accident.
What is collision insurance?
Legal responsibility for the financial cost of another person’s losses or injuries.
What is liability?
A risk that may result in loss, gain, or no change in condition.
What is speculative risk?
An arrangement where drivers collect money from their own insurance companies regardless of who caused the accident.
What is the no-fault system?
This document is a contract between an insurance company and a person joining a risk-sharing group.
What is a policy?
Insurance that pays costs of minor injuries to visitors on your property.
What is medical payment coverage?
The replacement cost of an item minus depreciation.
What is actual cash value?
Loss that results immediately and directly from a hazard insured against.
What is direct loss?
A group of people who cannot obtain motor vehicle insurance.
What is the assigned risk pool?
The chance of loss or injury that insurance helps protect against.
What is risk?
Insurance that covers physical injuries you cause to others in a vehicle accident.
What is bodily injury liability?
The full cost of repairing or replacing an insured item.
What is replacement value?
Loss that results from a peril but not directly or immediately caused by it.
What is indirect loss?
Insurance that covers losses measured in terms of reduced property value or medical expenses under the policy.
What is legal liability loss?
Anything that increases the likelihood of loss through peril.
What is a hazard?
This insurance protects you if you're in an accident with a driver who has no insurance or hits and runs.
What is uninsured motorist’s protection?
Additional insurance that covers specific high-value items.
What is a personal property floater?
Failure to take ordinary reasonable care to prevent accidents.
What is negligence?
The contents of a home, such as clothing and appliances, are called this type of property.
What is personal property?