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.

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: 10 June 2020

You May Also Like

Best Car Insurance Companies in India

By Sajja Praveen Chowdhary
-
Updated: 27 October 2020
-
433989 Views

Best Car Insurance Companies in India Getting motor insurance is essential for all the car/vehicle owners and drivers in India. It is mandatory to have third party car insurance in India under the Motor Vehicle Act, ...
read more
Insured Declared Value (IDV)

By Sajja Praveen Chowdhary
-
Updated: 30 September 2020
-
340218 Views

Insured Declared Value (IDV) Insured Declared Value (IDV) is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of vehicle. Basically, IDV is the current market value of the vehicle....
read more
Zero Depreciation Car Insurance

By Sajja Praveen Chowdhary
-
Updated: 30 September 2020
-
321913 Views

Zero Depreciation Car Insurance In a zero depreciation policy the insured gets the total cost of the damage or loss that is caused to the insured car. The depreciation value of the replaced or damaged parts is usually...
read more
No Claim Bonus (NCB) in Car Insurance

By Sajja Praveen Chowdhary
-
Updated: 30 September 2020
-
223674 Views

No Claim Bonus (NCB) in Car Insurance No Claim Bonus (NCB) is a reward, given by an insurer to a policyholder for making no claims during the policy term. No Claim Bonus can be accumulated as a discount on the premium...
read more
9 Secrets That Your Motor Insurance Provider Won’t Tell You

By PolicyBazaar
-
Updated: 10 June 2020
-
211480 Views

9 Secrets That Your Motor Insurance Provider Won’t Tell You Due to the dangerous driving conditions, it is compulsory to have third party insurance for every vehicle plying on Indian roads. It ensures the overall sa...
read more