What is an insurance premium?

"What is a premium and how often do I have to pay it? I've never had car insurance before and I'm not familiar with this language."

Answer provided by
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Sophie Newman
Answered on Jul 28, 2021
Sophie Newman is a writer from California. Her hobbies include brewing her own kombucha, riding horses, and taking long road trips.
“A premium is the amount you pay each billing period for your car insurance policy so that you’re covered in the event of an accident.
Premiums are basically your monthly car insurance payment and change based on the type of insurance you have.
The premium is calculated using a variety of risk assessment variables, including:
  • driver’s age,
  • driving history
  • claims history
  • location
  • type of vehicle”
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