CAR COVERAGE BASICS
This mandatory coverage pays for damage to the other person's car or property (like a fence) if an accident is your fault.
What is Property Damage Liability?
This type of insurance protects the tenant's furniture, clothes, and laptop inside a rented apartment.
What is Renter's Insurance?
The most common method of risk management, where you pay an insurance company a premium to take on your financial risk.
What is Risk Shifting? AKA Insurance
If the total damage, or Loss, is $3,000 and your Deductible is $500, this is the amount of the insurance Payout.
What is $2,500?
The formal written contract between the insurance company and the policyholder that spells out the terms and conditions.
What is the Policy (or Insurance Policy)?
This optional coverage pays to fix your car if it is stolen, vandalized, or damaged by hail, fire, or hitting an animal.
What is Comprehensive Coverage?
This is the main difference between a Homeowner's and Renter's policy, as it covers the physical structure of the building.
What is Dwelling Coverage?
This risk strategy is demonstrated by deciding not to buy a motorcycle because of the high risk of severe injury.
What is Risk Avoidance?
The small amount you pay every month to keep your insurance policy active.
What is a Premium?
This term describes the risk family where too many cars in one area lead to high rates of fender-benders and low-speed collisions.
What is High-Density/Urban Risk?
This coverage pays for the other driver's medical bills and lost wages if you are the one who caused the accident.
What is Bodily Injury Liability?
If a fire makes a house unlivable, this specific coverage pays for the family's unexpected hotel bills and food costs.
What is Additional Living Expenses (ALE)?
A driver chooses a $2,000 deductible, knowing they will pay more out of pocket but save money on their monthly bill. This is an example of...
What is Risk Assumption? AKA Pay out of pocket
If your Loss is $1,500 and the insurance company Payout is $1,000, this is the amount of your Deductible.
What is $500?
Besides age and driving record, this non-driving factor related to your ZIP code can significantly raise your premium due to high theft rates.
What are Rating Territories?
This coverage pays to fix your car when you hit another vehicle or object, such as a guardrail.
What is Collision Coverage?
This type of liability coverage protects you if a guest is seriously injured while visiting your home.
What is Personal Liability Coverage?
Installing a fire extinguisher in your kitchen or taking a defensive driving course are examples of this strategy.
What is Risk Reduction?
If your Deductible is $1,000 and the insurance Payout is $4,000, this is the total amount of the Loss.
What is $5,000?
In most states, this financial score is used by insurance companies to predict the likelihood of you filing a claim, which can affect your premium.
What is Credit Score?
This coverage is a financial "backup plan" used when you are hit by a driver who has no insurance.
What is Uninsured Motorist Coverage?
This is the small amount of money you must pay out-of-pocket before your Home or Renter's insurance begins to pay for a covered Loss.
What is the Deductible?
On the Risk Ranking Scale, this is the name for an event like a hurricane or a massive hailstorm that causes catastrophic financial damage to thousands of people.
What is a Critical Threat?
The key rule for filing a claim: The Loss must be greater than this key policy amount.
What is the Deductible?
This is the specific reason an insurance company charges a 17-year-old much more than a 40-year-old.
What is Inexperience (or statistically a much higher risk due to inexperience)?