The degree of risk involved. Motor insurance companies have statistics that show that young, inexperienced drivers are more likely to be involved in car accidents than older drivers and therefore charge a higher premium. The potential sum of money involved. The amount of money that the insurance company may have to pay out in the event of a claim being made against them. The premium goes up in line with the amount of money you pay. E.G. A BMW will charge more for insurance than a Nissan Micra. vs The administration costs of the premium. People are employed in insurance. This cost is also spread out over insurance policies. Loading: Increase in the premium due to an extra risk in a particular situation. E.g. if you are a taxi driver you would pay a higher premium than an ordinary motorist because the taxi driver drives more often and is therefore more likely to have a crash/ Young male drivers loading could be higher than mature adult. No Claims Bonus: Reduction in the standard premium if the insured person has not made a claim against the policy It is like a reward with a for a given period of time. reduction in the cost of the premium for not
The degree of risk involved. Motor insurance companies have statistics that show that young, inexperienced drivers are more likely to be involved in car accidents than older drivers and therefore charge a higher premium. The potential sum of money involved. The amount of money that the insurance company may have to pay out in the event of a claim being made against them. The premium goes up in line with the amount of money you pay. E.G. A BMW will charge more for insurance than a Nissan Micra. vs The administration costs of the premium. People are employed in insurance. This cost is also spread out over insurance policies. Loading: Increase in the premium due to an extra risk in a particular situation. E.g. if you are a taxi driver you would pay a higher premium than an ordinary motorist because the taxi driver drives more often and is therefore more likely to have a crash/ Young male drivers loading could be higher than mature adult. No Claims Bonus: Reduction in the standard premium if the insured person has not made a claim against the policy for a given period of time. It is like a reward with a reduction in the cost of the premium for not