Chat with us, powered by LiveChat

Understanding Insurance

How Is My Premium Calculated? Calculating insurance costs is complicated. Insurers don’t know what the claims costs will be in any given year. That is why premiums have to be based on informed predictions about how much money may be needed to pay future claims. To make those predictions, insurers gather the information that they know from experience will help them set fair but accurate premium prices.

How Is My Premium Calculated?

Calculating insurance costs is complicated. Insurers don’t know what the claims costs will be in any given year. That is why premiums have to be based on informed predictions about how much money may be needed to pay future claims. To make those predictions, insurers gather information that they know from experience will help them set fair but accurate premium prices.

Here are some things insurers use to determine CAR INSURANCE premiums:
  • Claims history (number of claims in the recent past and their cost)
  • Driving record (history that could include collisions, convictions, tickets, etc.)
  • Type of car driven
  • Repair costs
  • Collision and crime rate where car is garaged
  • Driving frequency and distance
  • Additional coverage, deductibles and discounts
  • Government regulations, taxes (including reimbursing provincial health plans for treatment of victims of car collisions)
Here are some things insurers use to determine HOME INSURANCE premiums:
  • Location of dwelling (e.g., crime and fire rates of residence location)
  • Replacement cost of building and its contents
  • Type of residence (single family home, apartment, etc.)
  • Construction material used (brick, concrete, wood frame, etc.)
  • Distance from fire hydrant, fire station, etc.
  • Claims history (number of claims in the recent past and their cost)
  • Additional coverage, deductibles and discounts
  • Government regulations, taxes

LIFE IS A RISKY BUSINESS.

Sometimes those risks hit home – a car collision… your basement suffering water damage…your business interrupted by vandalism. At times like these, insurance is there to help us recover, get us back on our feet and provide peace of mind.

Thank you Insurance Bureau of Canada for this information.