Understanding Insurance Basics

How are premiums calculated?

Your premium is based on the probability that you will make a claim. Factors such as the ones listed previously may affect the cost of your premiums.

Insurers usually charge higher premiums to people who they think are more likely make a claim. People whom insurers consider less likely to make a claim will usually pay lower premiums.

For example, if you have a history of medical issues, you may pay higher life insurance premiums than someone with few medical issues.

If you have several accidents on your driving record, you may pay higher auto insurance premiums than someone who has no accidents on his or her driving record