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Short Rate Short Term Insurance


Definition of "Short rate, short term insurance"

Raini Gordy
  Carrington Real Estate

Coverage for less than one year. Insurers generally charge higher rates for short-term policies than for longer term insurance, such as an annual policy, because of the need to recoup relatively fixed administrative and processing costs over a shorter policy life; and the likelihood of adverse selection, with buyers seeking insurance only at times of the year when they know they face greatest likelihood of loss.



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