When might an insurance company apply a loading to your premium?

An insurance company applies a loading to your premium when you have made multiple claims because this indicates a higher risk associated with insuring you. When a policyholder frequently files claims, it suggests that they may have a history of losses that the insurance company must cover. Consequently, to account for the increased likelihood of future claims stemming from this higher risk, the insurer raises the premium through a loading. By doing so, they seek to balance the financial exposure that comes with a riskier client profile.

In contrast, being a low-risk client would typically lead to lower premiums or potential discounts rather than a loading. Insuring multiple items might lead to a multi-policy discount but wouldn’t inherently trigger a loading. Renewing a long-term policy could also pertain to standard adjustments but doesn't automatically imply a loading due to claims history.