Cancellation Provision Clause

Definition of "Cancellation provision clause"

Provision permitting an insured or an insurance company to cancel a property and casualty or a health insurance policy (circumstances vary; see also commercial health insurance) at any time before its expiration date. The insured must send written notice to the insurance company, which then refunds the excess of the premium paid above the customary short rates for the expired term. If the insurance company cancels, it sends written notice to the insured of cancellation and refunds the unearned portion of the premium.