What is Premium?
Quick answer
A premium is the amount you pay — monthly, quarterly, or annually — to keep your insurance policy in force.
A premium is the amount you pay — monthly, quarterly, or annually — to keep your insurance policy in force. It does not count toward your deductible or out-of-pocket maximum.
Examples
- A $180/month auto premium costs $2,160 per year.
- Homeowner premiums can be paid through escrow with your mortgage.
- Missing premium payments can cause a policy to lapse.
Why this matters
ReadMyPolicy helps you see whether your premium is buying real coverage or just the minimum — you'd be surprised how often a cheaper premium hides worse protection.
Read more in our guides
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- Insurance policy exclusions: the coverage gaps most people discover too late
- Health insurance deductible vs out-of-pocket maximum: the difference that can cost thousands
Frequently asked questions
What is Premium?
A premium is the amount you pay — monthly, quarterly, or annually — to keep your insurance policy in force. It does not count toward your deductible or out-of-pocket maximum.
When does Premium matter?
ReadMyPolicy helps you see whether your premium is buying real coverage or just the minimum — you'd be surprised how often a cheaper premium hides worse protection.
What's an example of Premium?
A $180/month auto premium costs $2,160 per year. Homeowner premiums can be paid through escrow with your mortgage. Missing premium payments can cause a policy to lapse.
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