Although the terms insurance and premium are commonly used, many people do not have a clear understanding of their meaning. Being a leading insurance company in Ontario, we have put together this guide about insurance premiums to help you.
What is an Insurance Premium?
An insurance policy is a contract between you and an insurance provider. It states the circumstances in which you can be compensated for specific losses. The fee in exchange for which the company agrees to pay you a certain sum of money is known as the premium. The amount of policy coverage may vary based on the type of insurance, deductible, and a variety of other aspects.
How Much Should You Pay?
An insurance premium can vary depending on the type of coverage and the risk involved. This is why it helps to work with reputable insurance brokers who have connections with many top insurance companies. They can help you choose the right policy that meets your requirements at a fair price. Here are three primary factors that typically affect the premium amount:
- Type and Extent of Coverage
Insurance companies offer many choices when you purchase a policy. Your premium may increase if you choose a plan that offers more coverage or comprehensive coverage.
- Amount of Insurance Policy
Whether you are looking to purchase home insurance, auto insurance, or any other policy, you will have to pay a higher premium for more coverage. If the worth of your property or asset is more or if the value of the policy is more, you also may have to pay a higher premium.
- Your Personal Information
This includes details such as your insurance history, the area where you live, and other aspects of your life. They are used for the calculation to determine the amount of your insurance premium.
Are Premiums the Same for All Insurance Companies?
Not all companies charge the same premium. This is because they use different rating criteria to determine the premium amount, resulting in different premium values. This is why it helps to ask around and compare different insurance policies to decide which one meets your needs and ensure that you find the best coverage.
Insurance Premium Payment Options
Paying insurance premiums is an easy and straightforward process. Depending on your insurance company, you may have the following options:
- Monthly Premium – requiring you to pay 12 equal payments in a year.
- Quarterly Premium – divided into four payments for each quarter.
- Annual Premium – that requires you to pay an upfront amount in full for the year. You may also be eligible for specific discounts if you choose this option.
Work with Our Insurance Brokers in Ontario
Orr & Associates is a leading insurance company in Ontario, having a dedicated team of qualified and experienced brokers to help you. We will work towards understanding your needs and come up with suitable coverage at a competitive price. We also offer 24/7 support through our online client portal.