Premium
The amount you pay for insurance coverage.
Pro Rata Cancellation
A cancellation settlement method where unearned premium is returned without a penalty, based on time remaining.
Rate
The price per unit of exposure used to calculate premium.
Surcharge
An additional charge added to a premium due to increased risk factors such as claims or violations.
Short Rate Cancellation
A cancellation method where the insurer keeps a portion of unearned premium as a penalty, depending on policy terms.
Grace Period
A period after a due date during which payment may be made without cancellation, depending on policy terms and state rules.
Earned Premium
The portion of premium that corresponds to the time coverage has already been provided.