What is the term used for the cost per unit of insurance coverage?

The term that refers to the cost per unit of insurance coverage is "rate." In the context of property and casualty insurance, a rate is typically expressed as a premium multiplied by the number of units of coverage purchased. It serves as a fundamental component in determining the total cost of an insurance policy.

When calculating an insurance premium, insurance companies assess the risk associated with the item covered and then apply a rate that reflects that risk. This means that the rate can vary significantly based on factors such as the type of coverage, the insured property, the location, and the history of claims.

Understanding the distinction between "rate" and other terms like "premium," "deductible," and "fee" is crucial. The premium is the total amount paid for coverage, while the deductible is the amount the insured has to pay out-of-pocket before the insurance coverage kicks in. A fee could refer to additional costs associated with the insurance policy, but it does not represent the cost per unit of coverage. Thus, "rate" accurately describes the cost per unit, making it the correct answer.