 |
How is short rate calculated in insurance? |
[Edit] |
Short rates represent a penalty for terminating a policy at other than the company's request. For example if the company were to cancel a policy at its request the prorate refund would be .507 of the annual premium at day 180 (1/2 year) The short rate refund on the same premium would be .400 at day 180. As you can see it is about 10% penalty. Example: on a $1000 premium you would get $507 back prorate but only $400 back on short rate. Hope that helps.
First answer by Leibowm. Last edit by Leibowm. Contributor trust: 14 [recommend contributor]. Question popularity: 9 [recommend question]
|
Also see on Answers.com Research your answer: |
Answers.com > Wiki Answers > Categories > Business and Finance > Insurance > Auto Insurance > Tickets Points and Auto Insurance Rates > How is short rate calculated in insurance?
Our contributors said this page should be displayed for the questions below. (Where do these come from ) |
| If any of these are not a genuine rephrasing of the question, please help out and edit these alternates. |
