Whether you’re shopping for auto insurance or meeting with an insurance agency to get quotes for homeowners coverage, you’ll have to pay a premium to keep your policy active. This fee, which can be paid monthly, every six months, or annually, may seem like an onerous expense, but it’s actually a crucial component of the insurance system. When you pay your premiums, a significant portion of the funds go into a pool, which is used to pay for valid claims, so the money will be there if you need it.
How Insurance Premiums Work
Purchasing an insurance policy means agreeing to pay into a certain fund, from which money is withdrawn if someone has a claim. This system works for the benefit of everyone who holds similar policies, helping pay for damages the individual may not be able to afford on their own. Even if you’ve never filed a claim before, your contributions to the system ensure there are enough funds available to help you rebuild after a storm, fix your car after an accident, or pay unexpected hospital bills.
Factors That Can Influence Your Premiums
Every insurance policy holder has to pay premiums, but not everyone pays the same amount. Insurance companies use a variety of factors to determine how likely you are to file a claim. For instance, if you have speeding tickets on your record, you might pay more for auto insurance, and homeowners could face higher premiums if they live in an area with frequent storms. Your insurance agency can explain the factors influencing your premiums and help you find the most affordable policy for your needs.
If you’re looking for a leading insurance agency with a reputation you can trust, turn to the professionals at Michel Insurance Agency LLC, one of Florence, KY’s premier brokers. Their team will carefully evaluate your needs and find policies tailored to your unique situation, ensuring you have the insurance you need without paying for coverage you don’t. Visit their website now to learn more about their services, and call (859) 371-9458 to request a quote from a member of their team today.