The part of the subject matter of a marine insurance that has never been at risk, e.g., the extent to which declarations under a floating policy fall short of the sum insured.

Percentage of annual premiums charged for short period policies.

The charge required for Insurance or bonds taken for less than one year. Short term rates are usually proportionately higher than the annual term rates since it involves the same volume of labour and charges for acceptance of risk and Insurance of Policy documents.

A type of cancellation wherein the insured is not refunded in proportion to the amount of coverage days left in the policy’s term. The end result of this is the insured paying more for the days of coverage they receive than they would have if they had kept the policy all along.
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See: Cancellation.
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Termination of an Insurance Policy at the request of the insured prior to its expiration date; the Policy provides that the Insurer gets to keep more than a pro rata portion of the premium. The Insurer keeps an extra portion of the premium as an increased charge because of the fixed expenses incurred by the Insurer in Writing and servicing the Policy the insured has cancelled. Compare with “pro-rata cancellation.”

The premium associatd with a policy issued for a shorter than usual policy term.

A schedule of less than pro-rata premiums that will be refunded if an insured cancels a contract before the end of its term. The less than pro-rata refund is justified by the fact that most of the insurer’s expenses of selling insurance are incurred at the beginning of a policy period.