Alberta General Insurance Level 1 Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

A history of claims filed by the insured can lead to an increase in insurance premiums because it serves as an indicator of risk for the insurance company. An individual who has filed multiple claims is perceived as more likely to file future claims, which raises the insurer's potential liability. Insurers analyze past behavior to predict future behavior, and a higher frequency of claims can signal that the insured may be riskier to insure compared to someone with little or no claims history. Consequently, insurers often adjust premiums upward to compensate for this increased risk, reflecting the likelihood of additional claims based on past experiences.

The other choices do not typically influence premium increases in the same way. While a safety alarm system might decrease premiums as it reduces risk, the length of the insurance policy does not inherently correlate with risk, and having multiple policies could even lead to discounts through bundling.