What is Insurance Premium?

Insurance Premium is paid as a cost to cover a possibly unseen devastating loss. It is the actual amount of money charged by insurance companies for active coverage. An insurer is the company selling insurance and insured is the policy owner.

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Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. The insurance rate is a factor used to determine the amount (called the premium) to be charged for a certain amount of insurance coverage.

Insurance premiums vary widely among insurance providers, so it is advisable to get several quotes from various providers before committing. Both the Voluntary Excess and premium are inter-related.

They are part of the amounts to be paid for the coverage. When the Excess is high, the premium is automatically low and vice versa. These two parameters affect the cost of the insurance you purchase.

Written By: PolicyBazaar - Updated: 26 June 2021