Question

Is an insurance a variable or fixed cost

Answer 1

Insurance is typically considered a fixed cost. This is because insurance premiums usually remain constant over a specific period (such as monthly or annually), regardless of the level of business activity or production volume. Fixed costs do not change with the level of output, whereas variable costs fluctuate based on production or sales levels. However, it's worth noting that while the premiums may be fixed in the short term, they can change upon renewal or if circumstances change, such as changes in coverage, risk assessment, or claims history.