A fire insurance policy has an annual premium of $$780 what is the regular refund if the policy is canceled by the insurance company after five months?


3 Answers

Anonymous Profile
Anonymous answered
A regular prorate would yield 5/12 x $780 = $325. That is provided, of course, that you paid 12-month premium in full five months ago, to the effect that the insurer did not advance you any of the premium; and that the cancellation was not for your breach, such as for missed or delinquent payment.

Only under the condition in which carrier (hence the underwriter) withdrew solely of their own volition would you typically be given a full, prorated refund. That is because the original premium was predicated on actuarial evalution of risk-reward to insurer based on a minimum, annual premium term. Naturally, an actuary would judge risk-reward to be less favorable for, say, one month; or for five months. Additionally, you have right to ask for an explanation of how premium was determined if what you received seems unreasonable.
thanked the writer.
Anonymous commented
Hi thank this is how i figured it and got the same answer $780 dividide by 12 = 65
65 x 5= $325 is that correct I'm not good with fractions thanks again
Anonymous commented
Basically the same result, just a different approach. Good work there.
Karl Sagan Profile
Karl Sagan answered

Thank you for such detailed descriptions. I now understand this topic even better, although to be honest, I don't really need it, since I use the services of One Sure Insurance. I just submitted an application and the specialists responded and helped me to draw up all the necessary documents for insurance.

Benjamin Kusi Profile
Benjamin Kusi answered
780/No of months within a year=12
=65*No of month after cancellation=5
therefore the answer is 445

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