risk-based premiums

Risk-based premiums are insurance costs that reflect the likelihood of a claim being made. Insurers assess various factors—such as age, health, driving record, or property location—to determine how risky a policyholder is. Higher risk translates to higher premiums, while lower risk results in lower premiums. This approach aims to ensure that everyone pays a fair price based on the individual level of risk they present, promoting a more balanced distribution of costs across all policyholders.