Install
Rates and Premiums terms
What coverage costs, where it is rising and why.
Insurance rateThe price per unit of coverage an insurer files with the state, which rating factors then adjust to produce your individual premium.PremiumThe amount you pay for an insurance policy over its term, built from the insurer's rate, your rating factors, coverage choices and discounts.Annual mileageHow many miles a car is driven in a year, a rating factor because more time on the road means more chances of a claim.Claims historyThe record of insurance claims you have filed or that were paid because of your driving, which insurers check when pricing and accepting a policy.Combined ratioA measure of insurer underwriting profit: claims and expenses as a percentage of premium, where under 100 means a profit and over 100 a loss.Commute useA vehicle-use rating for a car driven to and from work or school, typically priced between pleasure use and business use.Credit-based insurance scoreA score built from parts of your credit report to predict how likely you are to file insurance claims, used in pricing where state law allows.Expense ratioAn insurer's operating costs, such as commissions, salaries and advertising, as a percentage of premium; one half of the combined ratio.Garaging addressThe address where a car is mainly parked overnight, which insurers use to price a policy and which must be reported accurately.Insurance scoreA number insurers use to predict how likely you are to have claims, usually calculated from your credit report, that can raise or lower your rate.Loss ratioThe share of premium an insurer pays out in claims, often including claim-handling costs; a key number in rate filings and profit reports.Nuclear verdictA jury award far larger than the proven economic losses would suggest, most often defined as one over $10 million.Pleasure useA vehicle-use rating class for cars driven for errands and recreation, not for a regular commute to work or school or for business.Rate filingThe package of proposed rates, rating rules and supporting data an insurer submits to a state regulator when it wants to change prices.Rating factorsThe characteristics insurers use to price a policy, such as driving record, location, vehicle, mileage and, where allowed, age and credit.ReinsuranceCoverage that insurance companies buy to pass part of their risk to another company, helping them pay large or clustered losses.Social inflationThe rise in insurance claim costs beyond general economic inflation, attributed to litigation trends, larger jury awards and broader legal theories.SurchargeAn extra charge added to your premium after an at-fault accident, traffic violation or claim, usually lasting three to five years.Territory ratingPricing based on where a car is garaged, with each area assigned a factor that reflects its local claim costs.UnderwritingThe process an insurer uses to decide whether to accept an applicant, on what terms, and in which pricing tier or company.Direct written premiumThe total premium an insurer charges on policies it writes in a period, before reinsurance, used to measure market share and company size.Earned premiumThe share of a policy's premium that pays for the part of the term already past; the rest is unearned and refundable on cancellation.Non-owner car insuranceLiability coverage for people who drive but do not own a car, often bought to keep coverage continuous or to carry an SR-22 filing.