What is the Definition of Auto Insurance Premium?

What is the Definition of Auto Insurance Premium?

The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses. Prices vary from company to company, as with any product or service. Premiums also vary depending on the amount and type of coverage purchased; the make and model of the car; and the insured’s driving record, years of driving and the number of miles the car is driven per year. Other factors taken into account include the driver’s age and gender, where the car is most likely to be driven and the times of day—rush hour in an urban neighborhood or leisure time driving in rural areas, for example. Some insurance companies may also use credit history related information. (See Insurance score)

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Insurance?

What is the Definition of Auto Insurance Premium?

What is the Definition of Auto Insurance Premium?

Check out other definition of insurance terms below:

What is the Meaning of LADDERING In Insurance Terms?

A technique that consists of staggering the maturity dates and the mix of different types of bonds.

What is the Meaning of LAPSE In Insurance Terms?

The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

What is the Meaning of LAW OF LARGE NUMBERS In Insurance Terms?

The theory of probability on which the business of insurance is based. Simply put, this mathematical premise says that the larger the group of units insured, such as sport-utility vehicles, the more accurate the predictions of loss will be.

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