A policyholder who has a Irvine, CA Renters Insurance wanted to know what is a renters insurance premium. That’s a good question, and it’s a word that’s tossed around pretty freely without much reference to whether or not anyone really knows what it means.
Your insurance premium is the amount of money that you pay in return for the underwriter assuming some set amount of risk. You pay your premium, and the insurance company agrees to pay if a certain defined set of things happens.The insuring agreement in your renters insurance policy even says that the risk assumption is in return for you paying the premium.
Your insurance premium is set based on the amount of risk that you present to the company. In most instances in personal lines insurance, this is based on simple factors like where you live and information about you as an individual. It’s generally pretty much set in stone, given those factors, and not likely to change even if you ask nicely since it’s based mathematically on the chances of you costing the company money during the policy term.
When you pay your insurance premium, you pay it in advance in some fashion. That brings us to the concept of earned vs unearned premium. Essentially, you prepay for the insurance but that money is still yours right up until the company has provided coverage in return for the money. Earned premium is money that you’ve paid or that you owe for coverage which has already been provided. Unearned premium is money that you’ve paid or that you owe for coverage which has not yet been provided to you.
There are additional fees which may be considered to be fully earned. For instance, there may be an MGA fee or policy fee which is fully earned in the act of writing the policy. There may be a minimum premium owed. That would cover the costs of underwriting and issuing the policy to begin with if you were to cancel it before that much premium had been earned. You’d still owe that amount because it’s fully earned. If in doubt, ask what fees and premium are “fully earned” and what is refundable.
Your insurance premium needs to be paid timely, as well. That’s why most people elect to have it directly deducted from a credit card. There’s a non-zero risk that the bill will be delayed in the mail, or that your electronic bill will end up in your spam folder, and having it directly deducted helps to mitigate that risk and ensures that you remain covered. If you still have questions about your premium, or about renters insurance in general, just call (800)892-4308 or click to get covered - whether you need Irvine renters insurance quotes online or coverage anywhere else!
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