You’ve probably come across the term premium at some point in your life.
This fancy term should not be confusing.
Insurance companies also use the term premium to describe price. It’s the cost you pay to your insurer for coverage.
Car insurance premiums are usually expressed in one-month, six month or yearly amounts. Most companies will allow you to pay your annual or six-month premium monthly.
After you have paid your first premium, or the entire amount if you choose to pay it all, you will be officially covered. To ensure that you are covered, make sure to keep up with your payments. This will prevent you from losing coverage.
Note: Although a car insurance premium is what you pay to get your policy, it might not be the only cost. If you are involved in an accident, and you file a claim for damages, you might have to pay a deposit before you receive a payout. If you don’t have enough coverage, you may end up paying out-of-pocket for any remaining expenses.
What is the difference between a quote and a premium?
You’re likely to have received a quote if you have ever searched online for car insurance. A quote is just an estimate of the premium for your policy.
The estimated price of your car insurance premium may differ from what you received initially. Insurance companies don’t always request all the information they need to generate quotes. Companies will instead do their research before determining your eligibility or final price.
Tip
Insurers will eventually catch you if you fail to mention something when you fill out a quote form. To get a more accurate quote, be truthful and as accurate as possible.
Why are my car insurance premiums so high?
Car insurance premiums can be very different from one person to the next, even if they are your neighbors and drive the same car as you. Auto insurers consider many factors when determining a premium.
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Driver details. These factors include age, gender, marital status and driving record.
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Car details. Considerations include the make and model of your car, the mileage, theft rates, and safety features.
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Policy details. These factors include coverage types, limits, deductibles and claims history.
Auto insurers also weigh each factor differently. While one insurer may offer a lower premium, another might charge more. It’s important to get at least three quotes so you can compare prices.
Questions frequently asked
Why is my car insurance premium so different from my quote?
Based on the information you provide upfront, a quote is an estimate of how much you will pay for auto insurance. Your quote will not reflect the actual premium you’ll pay. Auto insurers often conduct a deeper background check to determine eligibility and price. If you have entered incorrect information on the quote form, this will also apply to your premium.
What are the best ways to get a lower premium?
There are many ways to lower your car insurance premium and get cheap automobile insurance . These include shopping around with other companies, paying your six-month premium upfront, asking for discounts, bundling policies, and driving less.
Where can I find my premium
Call your agent or company to find out your car insurance premium for an existing policy. Also, look for your car Insurance Declaration Page — the one-to two-page summary of your policy and the premium that you are paying.