Insurance Basics

How do insurance companies determine premiums?

Insurance companies determine premiums in different ways. When it comes to car insurance, there are a lot of factors:

• Your insurance history. How long you’ve been insured in the province you’re looking to get insurance in is one thing the insurance company considers.
• If you’ve been in any accidents or if you’ve received speeding tickets, the insurance companies will take that into account.
• How you use the vehicle is important. Is it for personal use, or is it part of your business?
• Companies take into account how much you drive. If you have a long commute it could increase your rate.
• Where you live is a huge factor in determining your rate.

When determining home insurance premiums, the factors are different:

• Your claims and insurance history
• Where you live
• What coverages you’ve selected. When it comes to home insurance, there is a lot of optional coverages to consider which will affect the premium.