Unearned Premium Insurance

Definition of "Unearned premium insurance"

Carol Mallen real estate agent

Written by

Carol Mallenelite badge icon

RE/MAX Services

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.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Plan that provides protection in the event of legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy. ...

Program through which employees purchase individual life insurance and disability income insurance by having the employer reduce their income by the required insurance premium. Since the ...

Difference between the rent paid by a lessee as fixed by a lease prior to destruction of property and the rent received by the lessor after that property has been restored. ...

Protection under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of ...

Insurance company whose domicile is in a state other than the one in which the company is writing business. ...

Process of calculating a premium so that it is adequate-sufficient to pay losses according to expected frequency and severity, thereby safeguarding against the insurance company becoming ...

Coverage for goods during shipment on a common carrier. ...

Authority derived from an agent's contract with an insurance company. ...

Record a debit (or other) agent makes for premiums collected, time period for which the policy is paid, and the week of collection or date the premium was paid. In essence, the debit agent, ...

Popular Insurance Questions