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
Duration of a policy. Property and casualty coverages are usually written for one year, although a personal automobile policy can be for six months. Life insurance can be written on a term ...
Standard set under the occupational safety and health act that sets allowable levels of worker exposure to such toxic substances as asbestos, certain chemicals, and radiation. In many cases ...
Coverage for goods in transit and the vehicles of transportation on waterways, land, and air. ...
Dollar limitations under the Internal Revenue Service code as follows: The elective annual deferral limit is $10,000. A highly compensated employee's annual compensation limit is $80,000. ...
Situation wherein the agent's conduct causes a client or prospective insured reasonably to believe that the agent has the authority to sell an insurance policy and contract on behalf of the ...
Coverage for goods during shipment on a common carrier. ...
Additional amount of surplus generated by an additional amount of capital to be included in book value surplus. This additional surplus is necessary to act as a supplement to the statutory ...
Proceeds from a life insurance policy paid on a monthly basis instead of in a lump sum. ...
Classification at death of all pension plans, profit-sharing plans, individual retirement accounts (IRAS), annuities, and installment payments to the extent to which the deceased was ...
Have a question or comment?
We're here to help.