Fear Premium

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Fear Premium

An increase in prices because of investor nervousness about a future event. For example, the price of contracts on oranges may increase if a hurricane is expected to hit Florida (where oranges are grown). The price may return to normal if the event does not take place (or is not as bad as predicted).
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References in periodicals archive ?
Experts now fear premiums could shoot up by a further 15% over the next year.
RIP-OFF.. SIMPLES; Average cost of car insurance pounds 564 after 20% rise this year
Oil prices have stabilized to more reasonable levels over the last couple of months, overcoming the "fear premiums" brought on by concerns about terrorism and the infrastructure damage in the refinery-rich Gulf region as the result of near weekly hurricanes.
Living up to its name: International Truck and Engine Corp. spans the globe with strategic moves that included purchase of MWM, engine cooperation with MAN
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