Unearned Premium Insurance
Definition of "Unearned premium insurance"
Coverage for loss of unearned premium if insured property is destroyed before the end of a policy period. The policyholder pays in advance for insurance, but the insurer does not earn the premium until coverage is provided. For example, if a policy period is one year, one-twelfth of the premium is earned each month. After six months, one-half of the premium is still unearned and belongs to the policyholder if the policy is canceled. If the property is destroyed in the second month and the insurer pays the claim, the policyholder would have nothing left to insure. Unearned premium insurance reimburses the insured for the part of the premium paid up front that is no longer needed for insurance coverage.
Popular Insurance Terms
Same as term Automobile Assigned Risk Insurance Plan: coverage in which individuals who cannot obtain conventional automobile liability insurance, usually because of adverse driving ...
Section of an insurance company that evaluates claims for their subsequent payment. ...
Common exclusion in life and accidental death insurance (double indemnity) policies, indicating that coverage does not apply unless an insured is a passenger on a regularly scheduled ...
Method of reducing an employee pension according to IRS procedures: Offset method restricted to a DEFINED BENEFIT PLAN under which a mandatory percentage of the monthly Social Security ...
Provision of a reinsurance contract that states that the reinsurance company remains liable for its predetermined share of a claim submitted by an insured, even though the primary insurance ...
Employee benefit program that emphasizes the pursuit of a lifestyle that minimizes the occurrence of sickness through an organized program of preventive medicine. Such a program includes ...
Type of pension in which benefits may vary depending on the investment performance of the pension plan assets. Contributions are made to fund a target benefit, such as 35% of compensation, ...
Type of livestock insurance that covers for cattle and sheep on the range from October 1 to May 1 in the Western states. Perils insured against are the weather, including freezing; most ...
12-month period from the date of issue of a policy as stated in its declarations section. ...
Have a question or comment?
We're here to help.