Premium
Definition
The amount you pay for insurance coverage, typically monthly, quarterly, or annually. Premiums are calculated based on risk factors including your location, coverage amount, deductible, claims history, credit score (in most states), and the specific coverages you select. Higher deductibles generally result in lower premiums.
When This Matters
Your homeowners insurance premium is $2,400 per year. If you increase your deductible from $1,000 to $2,500, your premium might drop to $2,100 per year.
Related Terms
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