Premium

Definition
What is premium? The insurance answer is this is the money that you pay for the coverage that you buy.

How long does it last?
Your premium can reflect different terms of insurance. The usual is a one-year term. The premium can also be expressed in monthly payment terms which often is done to help minimize the actual larger annual total.

How do I pay?
$1,200 a year sounds like more then $100 a month so you will often hear premium expressed in this manner. Be aware that if you do choose the monthly option there is usually a service charge.

Insurance answer
When you pay for your insurance - you are paying a premium. This is what you give the insurance company for their commitment to pay you if there is a loss. Like all contracts you need to read the fine print. Keep the agent or broker up-to-date with any address change so they can get notices to you. Pay your insurance on time to avoid any gaps in coverage.