Common use of Premium Refund Clause in Contracts

Premium Refund. A Standard Flood Insurance Policy- holder whose property has been deter- mined not to be in a special hazard area after the map revision or a Letter of Map Amendment under part 70 of this subchapter may cancel the policy within the current policy year provided (a) he was required to purchase or to maintain flood insurance coverage, or both, as a condition for financial as- sistance, and (b) his property was lo- cated in an identified special hazard area as represented on an effective FHBM or FIRM when the financial as- sistance was provided. If no claim under the policy has been paid or is pending, the full premium shall be re- funded for the current policy year, and for an additional policy year where the insured had been required to renew the policy during the period when a revised map was being reprinted. A Standard Flood Insurance Policyholder may can- cel a policy having a term of three (3) years, on an anniversary date, where the reason for the cancellation is that a policy of flood insurance has been ob- tained or is being obtained in substi- tution for the NFIP policy and the NFIP obtains a written concurrence in the cancellation from any mortgage of which the NFIP has actual notice; or the policyholder has extinguishing the insured mortgage debt and is no longer required by the mortgagee to maintain the coverage. In such event, the pre- mium refund shall be pro rata but with retention of the expense constant. [43 FR 2573, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979, as amended at 49 FR 33658, Aug. 24, 1984; 53 FR 16279, May 6, 1988]