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
Formal process of setting aside funds on a mathematical basis to provide deferred income benefits. ...
Computation of the asset share value, surrender value, and reserve and the comparison of the three computations in order to judge the adequacy and equity of the tentative gross premium ...
Compensation payable to the owner of a ship detained for reasons beyond his or her control who incurs a loss of earnings because of the delay. Detainment can be caused by a delay in the ...
Federal legislation passed in 1974 that mandated that legislators in all states that are in receipt of federal funds for health care review and approve any planned capital expenditures to ...
Mechanism for contractually shifting burdens of a number of pure risks by pooling them. ...
Federal agency that regulates commerce across state lines. The ICC does not oversee insurance, which is subject to regulation by the states according to Public Law 15, McCarran-Ferguson ...
Legislation mandating that factors taken into account in the calculation of premium rates for automobile insurance include the insured's driving record, annual miles driven, and years of ...
Addition to the pure cost of insurance that reflects agent commissions, premium taxes, administrative costs associated with putting business on an insurance company's books, and ...
Coverage in the event that papers of intrinsic value are damaged or destroyed. Coverage is on an all risks basis. Limits of coverage can be quite high; but the insurance company will not ...
Have a question or comment?
We're here to help.