Common use of Time on Risk / Short Period Charges Clause in Contracts

Time on Risk / Short Period Charges. If you cancel your insurance in the first year with a new insurer it is very likely that they will charge what is known as short period rates. This will mean that the percentage of premium charged will be greater than the percentage of lapsed time. You should ensure that you understand the total charge being made before you cancel any existing insurance policy. Minimum and Deposit Some classes of business require minimum & deposit premiums. This means that the amount charged is the minimum premium underwriters will accept for the risk and there will be no return premium for early cancellation. It also means that whilst these policies are adjustable and additional premiums may be payable no return premium is allowed below the specific minimum & deposit.

Time on Risk / Short Period Charges. If you cancel your insurance in the first year with a new insurer it is very likely that they will charge what is known as short period rates. This will mean that the percentage of premium charged will be greater than the percentage of lapsed time. You should ensure that you understand the total charge being made before you cancel any existing insurance policy. Minimum and Deposit Some classes of business require minimum & deposit premiums. This means that the amount charged is the minimum premium underwriters will accept for the risk and there will be no return premium for early cancellation. It also means that whilst these policies are adjustable and additional premiums may be payable payable, on increased activity no return premium is allowed below the specific minimum & and deposit.