cancellation of an insurance policy at the request of the policyholder with a refund of premiums to the policyholder of less than would be given under pro-rata consideration
The term "short rate" in insurance and bonding is used to describe the charge required for insurance or bonds taken for less than one year, and in some cases, the earned premium, including a penalty, for insurance or bonds cancelled by the insured before the end of the policy period or term of bond.
When an insured cancels a policy before its expiry, the returned premium is based on this type of calculation. The premium returned to an insured receives deductions to account for the administration expenses generated by the early cancellation.
A method of calculating the premium refund on a hazard insurance policy cancelled between anniversary dates. To reimburse the insurance company for the additional administrative work involved in mid-term cancellation, a short-rate refund is less than it would be on a prorated basis.
The method of calculating the return premium on policies cancelled by the insured, providing a penalty because of the cancellation.
A reduction in the suggested retail price of less than 40%.
A home is sold and the homeowner's insurance policy is cancelled. The seller receives a short rate refund. This is less than the credit the seller would receive if the buyer were to take over the existing homeowner's insurance policy.