YOU ASK:
What is the definition of Exposure?
WE ANSWER:
Exposure, in the insurance industry, refers to the possibility of loss. This is the risk you are exposing yourself to. For a homeowner, for instance, the exposure would be the possibility of damage or loss of the house. For a person, it will be the possibility that he will die or get sick.
To protect yourself from exposure, you can buy insurance, which will compensate you for that loss, in the event that it does happen.
The premiums for an insurance policy usually is computed based on the expected probability of the loss, as well as other factors such as profit and expense loadings, premium taxes and commissions.
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More insurance terms around exposure:
- Extended Coverage
- Extended Replacement Cost Coverage
- Extended Term Insurance Option
- Face Amount
- Facultative Reinsurance
- Fair Access to Insurance Requirements Plans / Fair Plans
- Family Benefit Coverage
- Farmowners-Ranchowners Insurance
- Federal Funds
- Federal Insurance Administration (FIA)
- Experience
- Expense Ratio
- Exclusive Remedy
- Exclusive Agent
- Exclusion
- Excess of Loss Reinsurance
- Excess and Surplus Lines
- Escrow Account
- Errors and Omissions Coverage (E&O)
- Equity Indexed Annuity