What is a "premium"?

What is a "premium"?

Elliot Matloff (President and Broker, The Matloff Company) gives expert video advice on: What is an "underwriter"?; What is "coverage"? and more...

A premium is another word for how much you pay for that insurance policy. If you buy a home owner's policy and the insurance agent calls you up and says that the premium is $1000, you're going to write a check for $1000. You can usually pay it usually monthly, quarterly, semiannual, or annual. All that is premium, it's the amount of money you pay out to an insurance company in exchange for the policy that they're going to give you.