Your premium depends on several factors that reflect the level of risk and the cost of providing coverage. Insurers consider elements such as your coverage needs, chosen limits and deductibles, location, and market conditions. They also consider loss costs, claim handling expenses, and overall operating costs.
For example, in home insurance, factors like the property’s age, construction type, and roof condition can influence your rate. In auto, vehicle type, usage, and driving history may play a similar role. The higher the potential risk or cost of a claim, the higher the premium tends to be.