Reader’s Question:

What is the difference between car insurance premiums and car insurance rates ?

Monica

Hartford, CT

The terms premiums and rates are virtually interchangeable.

A meaning of “rate” is a fix amount of premium to be charged per unit of insurance. Some agents use car insurance rate to refer to the amount you will be charged and premium as the amount you have agreed or paid. For instance, they will say this is your “insurance rate” and when you pay that is your “insurance premium.’

The meaning of “premium” is consideration paid for a contract of auto insurance. Another meaning is the price of insurance an insured individual pays for a specified risk for a specified period of time.

Your insurance provider may speak of your rate or your premium or even your premium rate.

Either term is referring to the amount you will pay for your auto insurance coverage for the specified period time listed on your policy, normally a six or twelve month interval.