Four main factors typically determine an insurance premium.
When you purchase an insurance policy, the insurance company offers a variety of coverage options.
Your insurance premium may rise depending on how much coverage you choose or how comprehensive it is.
When looking at home insurance premiums, for instance, an open perils or all-risk coverage policy will cost you more than a named perils policy that only covers the essentials.
Amount of Coverage and the Cost of Your Insurance Premiums No matter what kind of insurance you buy—life insurance, auto insurance, health insurance, or any other kind—you will always have to pay a higher premium—which is more money—for coverage that is greater.
There are two ways this could work. The first method is fairly simple, while the second is a little more involved but still a good way to lower your insurance costs:
First, the dollar value you want on the thing you’re insuring can change how much coverage you have. A house insured for $250,000, for instance, will differ from a house insured for $500,000. It’s not hard to understand: The premium will be more expensive the more money you want to insure.
