What is an insurance premium?
An insurance premium is the actual amount of money charged by insurance companies for active coverage. An insurance premium for the same service can vary widely among insurance providers, which is why experts strongly recommend getting several quotes before committing to an insurance policy. Insurance agents or brokers will take your basic information and calculate an insurance premium estimate based on your answers and other factors. The lowest quoted price on an insurance premium may be the better bargain, but the level of coverage may also be lower. The cost of an insurance premium is largely based on statistics, not necessarily on individual habits or history. A 22 year old male seeking car insurance for a sports car can often anticipate a higher insurance premium than a 45 year old woman driving a mid-size sedan. Both may have excellent driving records, but the insurance company considers a younger driver in a faster car to be more at risk for accidents. Therefore, the insurance p
To answer the question “What is an insurance premium?” it is first necessary to understand the concept behind insurance itself. There was a time in the history of this country when an accident, injury or other crisis could result in the loss of property or health due to an inability of those involved to compensate for the damage. The idea of insurance – whether life, health, car, homeowners or other type of policy – is based on the need to “hedge” or protect against losses or costs that are more than what you would be able to pay on your own. For instance, a car insurance premium will pay to have your car repaired in the event of an accident. Because cars are typically a costly item (second only to the purchase of a home) the loss of a car due to accident could create a major hardship without adequate insurance. You could be responsible for the remaining debt on the automobile as well as the need to replace or repair the vehicle itself. Additionally, damage to property or injuries sust
An insurance premium is the periodic payment that a policyholder makes to an insurance company in exchange for insurance coverage. These payments are made at regular intervals, usually once a year or once every six months. Most insurance companies offer premium payment plans that permit the annual or six-month premium amount to be made in three, four, or even nine payments to make it easier to manage large premiums.
