What is covered by the insurance premium
Usually, the premium covers what stated in the insurance policy, as well as services provided or paid for, which, however, are entirely dependent on the specific policy and provide them with the type of protection. Below are the most common options and basic services, which are covered by insurance policies. It should be noted, first, that not all of these types of insurance are available or distributed in all countries, and secondly, there are many other types of insurance.
1. Life insurance usually involves a lump sum payment in case of death of the policyholder in favor of the person named in the will or in the policy. These funds may be paid for funeral activities, outstanding debts, the cost of living for his family members and other costs associated with the assets of the deceased.
2. Health insurance or health insurance usually covers the payment of a part of the costs for the services of a doctor, prescribed medications, operations, services, psychological support, medical procedures and emergency medical services. Not all of these services are always covered, as the conditions of insurance policies can vary significantly. The policy holder will likely have to pay out of pocket for certain services, or some part of the cost of services rendered.
3. Car insurance usually covers damage not only the vehicle owner's insurance policy, but also to any other vehicles in the event of an accident, as well as service companies, providing roadside assistance, and includes payment of medical care to those injured in the accident. Insurance policies for motorcycles, water vessels and other types of motorized vehicles are usually provided by the same types of services.
4. Property insurance requires that the insurance premium is paid annually and is included in the monthly mortgage payment (depending on the laws of the country). This policy usually covers damage in the event of theft, fire, natural disasters, etc. Policy provides coverage tenant damages in favor of the landlord, inadvertently caused by the fault of the tenant, or cover damage to personal property of the tenant.
How are insurance rates
The starting point for the calculation of the insurance premium is mainly statistics, but can be taken into account other factors that tend to be individual in nature. For example, a driver with the experience of 2 years have a higher insurance rate than a driver with experience of 15 years. Both can be impeccable driving record, but the insurance company rightly believes that a driver with less experience are more at risk to have an accident than more experienced drivers. Accordingly, the amount of the insurance premium, other things being equal, these drivers can be very different.
The same philosophy applies to premiums for health insurance in countries where the government provides free health care to their citizens. People with health problems, or those working in hazardous or dangerous work, pay significantly more than healthy people who work in safe conditions. For example, according to statistics from non-smokers get sick less often than smokers, and the builder can get a serious injury in an accident in the workplace than the accountant. Therefore, construction millwright who smokes will typically pay much higher insurance premiums than non-certified public accountant.
Insurance rates also vary geographically. For example, in the case of car insurance in cities or regions in which the accident statistics are above average, the amount of insurance premiums, all other things being equal, will be higher than in regions with below average accident rates. When insuring property will be taken into account not only its size and age, but it is as close to a flood zone, the likelihood of natural disasters in the region, etc.
In addition, the premium amount for the same service can vary significantly among different insurance companies, so it is strongly recommended that consumers familiar with a greater number of offers. However, we must realize that the lowest premium is not necessarily the best deal, since such insurance may not provide good cover losses.
Why can change insurance rates?
Insurance companies can raise insurance rates for many reasons, but one of the most common is a high demand for insurance policies. The insurance company usually bases its prices on the statistics of how much it paid for insurance policies. Ideally, it is trying to pay less money than it receives in premiums from policyholders. If the amounts paid as cover the damage on the insurance policy, grow, then the insurance company has reduced profit margins. As a result, the company will likely be forced to raise premiums to maintain profitability.
Also, the insurance company can raise rates if it expects growth in the number of applications for compensation. For example, if a person is physically healthy occasionally gets in a car accident, the insurance company can increase the premium for health insurance, as it reasonably expects that its costs of damage to the person's health can improve. Insurance rates may also rise due to the increase in prices for insurance, which is caused by an inflationary factor.
When insuring property (both the owner and the tenant) in the case when there is a revision of the boundaries of the zones flooding, earthquake zones and the like, your insurance rates may also increase. Also on the insurance premium can influence the fact the pet availability fire hazard systems, pools, etc.
Despite the fact that rates are rising in most cases, they can also be revised downward. For example, insurance companies offer good discounts to drivers who have some experience of driving without an accident. Enhancement or improvement of the property insured may also reduce insurance premiums. For example, the installation of fire safety in the home can lead to lower insurance rates on real estate. Many insurance companies offer a discount or reimbursement for health insurance when lifestyle changes, such as, for example, smoking.
Insurance premiums and late payments
Insurance premiums are usually charged on a monthly, quarterly, semi-annual or annual basis, depending on the type of insurance policy. We policyholders often have the opportunity to combine their insurance payments with payments for other services, or purchase several types of insurance policies in the same company, which usually reduce costs. For example, buying a car insurance policy and property from the same insurance company can give customers a discount.
If the policyholder does not exercise next insurance payment, the Company may suspend or even cancel the insurance policy. In this situation, the client will be asked to pay the remaining part of the premium in full, otherwise the insurance policy will be canceled. In almost all cases, a person can not make a claim the insurance company for damages if there is delay in insurance payments.
Also policyholder can not get a refund on his insurance premiums (in most cases), even if the insured event never occurred. For example, if there has been a real estate insurance, and during the period of insurance policyholder has not declared for damages, on the fact of his absence, the amount of the premium paid will not be returned to him. The exception is life insurance, the mechanism of action is implemented on the basis of other principles. If within the period of insurance is not an insured event (death of the insured person), the policyholder will receive compensation in the amount of its proposed premiums.