In insurance terms, risk refers to the probability of a loss occurring, multiplied by the value of the loss. Insurance companies use that equation to determine a monthly premium to carry a portion of their clients' risk. The monthly premium paid to insurance companies reduces the risk that an individual or business entity carries of incurring losses due to a wide range of events. These can include natural disasters, such as hurricanes, floods, earthquakes and fire. Additionally, losses incurred due to negligence, robbery, motor vehicle accidents and a range of other events are often also covered. Insurance companies are very careful about insuring individuals with a high risk profile as they are more likely to claim on insurance policies. People who have a history of reckless driving and violating traffic laws, for instance, will often have much higher monthly insurance premiums on their short-term car insurance policy. Similarly, a smoker and heavy drinker will pay more for health and life insurance and some companies may even exclude cover related to smoking and drinking.