An insurance premium is the amount you pay for your insurance coverage. It is the cost of the policy itself — the price of being protected.
How premiums are paid: a premium is usually billed on a schedule — monthly, quarterly, semi-annually, or annually. As long as you keep paying the premium, your coverage stays active. If a premium goes unpaid, the policy can lapse, leaving you without coverage.
Premium vs. deductible — do not mix them up:
- The premium is what you pay regularly to have the insurance.
- The deductible is what you pay out of pocket on a claim before the insurer pays.
- They often move in opposite directions — choosing a higher deductible usually lowers your premium.
What affects your premium: the type and amount of coverage, your deductible, the limits you choose, and risk factors specific to what is being insured — for a car, that includes your driving record and vehicle; for a home, its construction and location.
Ways to manage your premium: ask about available discounts, bundle multiple policies, choose a deductible you can afford, and review your coverage periodically so you are not over- or under-insured.
To see a premium estimate for your situation, get an insurance quote from RMO.