Before and after purchasing an insurance cover for your vehicle, you can also find out how your premium is being calculated. An insurance premium is an amount charged by the insurance company for your coverage.
Take this as part of your investment especially when getting motorcycle insurance. In most Australian insurance companies, the premiums for services are different from company to company. This is part of the reason why you need to shop for the best car insurance quote in Australia.
It is wise to note that when you are making your purchase, sometimes the insurance premium that has been quoted may not match the premium charged. There could be a slight difference which is attributed to the way your insurance premium has been calculated. Also, the number of premiums charged by the companies can be determined by mathematical calculations and statistics handled by the underwriting department of your insurance company.
Every customer who applies for insurance has to go through the underwriting process. The level of premium that you can be charged depends on statistical data that exists on your life history, health, and age. For instance, a 50-year-old driving an old sedan is likely to pay lesser than an 18-year-old who is driving a brand new sports car.
The process often involves investigations into medical information bureau reports, familial diseases, and motor vehicle reports. The information is then analyzed by actuaries who later attempt to predict how likely an applicant will make a claim. If the probability of the claim is high, the premium will be higher.
The actuaries also gather mathematical information based on mortality and sickness. After they analyze how likely the applicant may fall sick or die, a premium will be charged to suit the client’s case.
