What is an insurance 'premium'?
AnswerThe amount paid to buy an insurance policy
A premium is what the policyholder pays, often monthly or yearly, to keep coverage.
Money · Facts & stats
Insure facts & stats
7 fact-checked facts about insurance, each with the reason behind it. 5 more are in today's round and join this page after it closes.
The basics
What is an insurance 'claim'?
AnswerA request for payment under a policy
When a covered loss happens, the policyholder files a claim asking the insurer to pay.
Going deeper
What is a 'deductible' in insurance?
AnswerThe amount the policyholder pays before the insurer pays the rest
If a repair costs 1,000 and the deductible is 200, the policyholder pays the first 200.
What does an actuary do?
AnswerUses math and statistics to measure risk
Actuaries analyze data on events like accidents to estimate risks and costs.
What is reinsurance?
AnswerInsurance that insurance companies buy for themselves
Insurers buy reinsurance to share the cost of very large losses.
Expert level
Which 1666 disaster led to the first fire insurance offices in London?
AnswerThe Great Fire of London
After the Great Fire destroyed much of the city, the first fire insurance businesses were set up.
Which statistical principle helps insurers predict losses more accurately as they cover more people?
AnswerThe law of large numbers
With more policyholders, the average loss gets closer to the expected value, making costs predictable.
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