What does it mean when you have to pay a premium?

Find out when and how to pay your workers insurance premium.

You have a number of options for paying your premium:

Pay your premium now

Direct debit

Call us on 13 44 22 to set up a direct debit to pay your renewal premium instalments or to modify or cancel an existing direct debit arrangement. Download our direct debit service agreement (PDF 0.7MB) for terms and conditions.

BPAY

Refer to your premium notice and tax invoice for BPAY Biller code and Reference details.

Fees and surcharges

Applicable debit and credit card surcharge rates are as follows:

Paying in instalments

We are giving customers the option to make their renewal premium payments in monthly instalments. You are eligible to pay your renewal premium in monthly instalments if your average performance premium is $1,000 or greater (previously $5,000).

Note: Your 'average performance premium' is your base premium, calculated by multiplying your industry classification rate by how much your business pays in wages.

If your end of period adjustment is more than $1,000, you can pay it in three equal monthly instalments.

You will receive a schedule of instalments with your adjustment premium calculation notice.

If you miss an instalment or are having difficulty paying your premium, you should immediately contact icare on 13 44 22 to discuss what payment options are available.

Note: Your end of period premium adjustments cannot be paid using direct debit. This applies even if you have used direct debit to pay your renewal premium instalments.

Late payments

Late payment fees are charged on overdue premiums. These are compounded monthly on the outstanding balance at the end of each month.

Customers can see late payment fee charges on their icare Statement of Overdue Items.

The State Insurance Regulatory Authority (SIRA) confirmed in late June 2022 the prescribed rate of 0.721% in line with the Workers Compensation Market Practice and Premium Guidelines (MPPG) for policy periods commencing 30 June 2022.

If we need to contact you about an overdue premium one of our service providers listed below may reach out to you on our behalf.

Premium Collection Service Providers include:

• Revenue NSW, the state's revenue management agency (icare's primary collections provider from 1 September 2020).

icares approved Legal Debt Recovery Services Panel members (effective from 1 January 2022):

• Craddock Murray Neumann
• Hall & Wilcox
• Turks Legal
• Woods & Day Pty Ltd.

Need to pay your premium or contact us?

Pay your premium now

Everyone knows insurance costs money, but one term that may be new when you first start buying insurance is "premium." Typically, the premium is the amount paid by a person (or a business) for policies that provide auto, home, healthcare, or life insurance coverage.

For example, if you pay $212 per month to keep your car insured, your yearly insurance premium would be $2,544. You may have purchased a six-month policy, which would make your insurance premium $1,272.

Insurance premiums usually have a base calculation. Then, based on your personal information and location, you may have discounts that are added to the base premium that reduces your cost.

In order to get preferred rates, or more competitive or cheaper insurance premiums, additional information is used. You can learn about these factors in greater detail in the section about the four factors that determine the premium. 

The insurance premium may be paid on an annual, semi-annual, or monthly basis. If the insurance company decides that it wants the insurance premium paid upfront, it may also require that. This is often the case when a person has had their insurance policy canceled for non-payment in the past.

The premium is the basis of your insurance payment. An insurance premium may be considered taxable income to you in certain cases (for example, coverage for group-term life insurance that exceeds $50,000 and is carried directly or indirectly by an employer). Service fees might be added to it, depending on the local insurance laws and the provider of your contract. The National Association of Insurance Commissioners' Guidelines or your State Insurance Commissioners' office can provide you with more information on your local regulations if you have a question about fees or charges on your premium.

Any extra charges, such as issuance fees or other service charges, are not considered to be premiums and will be itemized separately on your premium or account statement.

The cost of your insurance premium will vary depending on the type of coverage you are looking for, as well as the risk.

This is why it is always a good idea to shop for insurance or work with an insurance professional who can shop premiums with several insurance companies for you.

When people shop around for insurance, they may find different premiums charged for the cost of their insurance with different insurance companies, and they may save a lot of money on insurance premiums just by finding a company that is more interested in "writing the risk."

An insurance premium is usually determined by four key factors:

Insurance companies offer different options when you purchase an insurance policy. The more coverage you get, or the more comprehensive coverage you choose, the higher your insurance premium may be.

For example, when looking at premiums for home insurance, if you purchase an open perils or all-risk coverage home insurance policy, it will be more expensive than a named perils home insurance policy that only covers the basics.

Whether you are purchasing life insurance, car insurance, health insurance, or any other insurance, you will always pay more premium (more money) for higher amounts of coverage.

This can work in two ways. The first way is pretty straightforward, and the second way is a little more complicated but a good way to save on your insurance premiums:

• Your amount of coverage can be altered by the dollar value you want on whatever you are insuring. For example, insuring a house for $250,000 will be different from insuring a house at $500,000. It's pretty straightforward: the more dollar value you want to insure, the more expensive the premium will be.
• You can pay less money for the same amount of coverage if you take a policy with a higher deductible. For example, with home insurance, you can save up to 25% by increasing your deductible from $500 to $1,000. In the case of health insurance or supplemental health policies, you can take higher deductibles or look at policies with different options like higher co-pays or longer waiting periods. 

Your insurance history, where you live, and other factors of your life are used as part of the calculation to determine the insurance premium that will be charged. Every insurance company will use different rating criteria.

Some companies use insurance scores, which can be determined by many personal factors, from credit rating to car accident frequency or personal claims history, and even occupation. These factors often translate into discounts on an insurance policy premium.

For life insurance, other risk factors specific to the person being insured will be used as well, such as age and health conditions.

Insurance companies have target clients, just like any business. In order to be competitive, insurance companies will determine what the profile of clients they want to attract is, and they will create programs or discounts to help attract their target clients.

For example, one insurance company may decide that it wants to attract seniors or retirees as clients, while another will price premiums to attract young families or millennials.

If an insurance company decides that it wants to aggressively pursue a market segment, it may deviate rates to attract new business. This is an interesting facet of insurance premiums, because it may drastically alter rates on a temporary basis, or on a more permanent basis if the insurance company is having success and getting good results in the market. 

Every insurance company has people who work in various areas of risk assessment.

Actuaries, for example, work for an insurance company to determine:

• The likelihood of risks and perils
• The costs associated with the event of a disaster or claim, and then actuaries create projections and guidelines based on this information

Using the calculations, actuaries determine how much cost will be involved in paying claims as well as how much money the insurance company should collect in order to make sure it makes enough money to pay potential claims but also make a profit.

The information from the actuaries helps to shape underwriting. Underwriters are given guidelines to underwrite the risk, and one part of the task is to determine the premium.

The insurance company decides how much money it will charge for the insurance contract it is selling.  

The insurance company has to collect the premiums from many and make sure it saves enough of that money in liquid assets to be able to pay the claims of the few.

The insurance company will take your premium and put it aside, letting it grow for every year you don't have a claim. If it collects more money than what it pays in claim costs, operational costs, and other expenses, the company will be profitable.

Earned premium is the portion of the total premium that an insurance company can show on its income statement as revenue, based on the policy's duration and how much of the term has passed.

In profitable years, an insurance company may not need to increase insurance premiums. In less-profitable years, if an insurance company sustains more claims and losses than anticipated, then it may have to review its insurance premium structure and re-assess the risk factors in what it is insuring. In cases like those, premiums may go up.

Have you ever spoken to a friend who was insured with one insurance company and heard them say what great rates they have, but then compared it with your own experience with the prices for the same company, and had it be completely different? This could happen based on various personal factors, discounts, or location factors, as well as competition or loss experience of the insurance company.

For example, if the insurance company actuaries review a certain area one year and determine that it has a low risk factor and only charges very minimal premiums that year, but then by the end of the year they see a rise in crime, a major disaster, high losses, or claims payouts, it will cause them to review their results and change the premium they charge for that area in the new year. That area will then see rate increases as a result. The insurance company has to do this in order to be able to stay in business. People in that area may then shop around and go somewhere else.

By pricing the premiums in that area higher than before, people may change their insurance company. As the insurance company loses the clients in that area who aren't willing to pay the premium it wants to charge for what it has determined as the risk, the insurance company's profitability or loss ratios will likely decrease.

Fewer claims and proper premium charges for the risks allow the insurance company to maintain reasonable costs for their target clients.

The trick to getting the lowest insurance premium is to find the insurance company that is most interested in insuring you.

When an insurance company's rates go too high all of a sudden, it is always worth asking your representative whether there is anything that can be done to reduce the premium.

If the insurance company is unwilling to change the premium it is charging you, then shopping around may find you a better price. It will also give you a better understanding of the average cost of insurance for your particular risk.

Asking your insurance representative or an insurance professional to explain the reasons why your premium increases or whether there are any opportunities to get discounts or reduce insurance premium costs will also help you understand whether you are in a position to get a better price and how to do so. 

• The insurance premium is the amount of money paid to the insurance company for the insurance policy you are purchasing.
• Your insurance history, where you live, and other factors are used as part of the calculation to determine the insurance premium price.
• Insurance premiums will vary, depending on the type of coverage you are seeking.
• Getting a good price for your insurance premium requires you to shop around for an insurance company that's interested in covering you.