What is an insurance premium?

An insurance premium is the amount of money an individual or business pays for an insurance policy.  It is typically paid on a regular basis, such as monthly or annually, to the insurance company in exchange for coverage and protection against specified risks.  The premium amount is determined based on various factors, including the type and amount of coverage, the insured's risk profile, and other relevant considerations.

Insurance premiums are essential for the insurance industry to function.  They enable insurance companies to pool the risks of many policyholders and provide financial protection in the event of covered losses, such as accidents, illnesses, property damage, or other unforeseen events.  The premium amount can vary widely depending on the type of insurance (e.g., business insurance, car insurance, health insurance) and the specific terms and conditions outlined in the insurance policy.

If you've got insurance questions, Westralian Insurance can help.  Call us today on (08) 9302 1388, or visit www.westralianinsurance.com.au

What is an insurance excess?

An insurance excess, also known as a deductible, is the amount of money that an insured individual must pay out of pocket before their insurance coverage kicks in and starts covering the remaining costs.  In other words, it is the initial portion of any insurance claim that the policyholder is responsible for.

For example, if you have a car insurance policy with a $500 excess and you make a claim for $2,000 in damages, you would need to pay the first $500, and the insurance company would cover the remaining $1,500.  The purpose of an excess is to discourage policyholders from making small or frivolous claims and to share the financial risk between the insured individual and the insurance company.

It's important to note that the specific terms and conditions regarding excess amounts can vary depending on the type of insurance and the insurance policy itself.  Some policies may have a voluntary excess, which the policyholder can choose, in addition to a compulsory excess set by the insurance company.  Understanding your insurance excess is crucial when purchasing or renewing an insurance policy, as it directly affects the cost of coverage and how much you would need to pay in the event of a claim.

For more information, give the team at Westralian Insurance a call today on (08) 9302 1388, or visit www.westralianinsurance.com.au