Asked by Helen Jimenez on Jun 09, 2024
Verified
Cameron Insurance Company insured Driver Gifford at an annual premium of $740. After 6 months, Gifford sold the car and canceled the insurance. Cameron Insurance Company refunded the remaining half of the premium at the short rate based on a penalty of 15%. Compute the amount of the short-rate refund.
Short-rate Refund
A refund of a portion of a premium on an insurance policy, calculated using a method that is less than pro-rata, often involving a penalty for early cancellation.
Annual Premium
The amount paid annually for an insurance policy, providing coverage over a specified period of time.
- Delve into and figure out the sums related to insurance policy cancellations and changes in the extent of coverage.
- Apply mathematical formulas to compute insurance company refunds based on short-rate cancellations.
Verified Answer
MN
Learning Objectives
- Delve into and figure out the sums related to insurance policy cancellations and changes in the extent of coverage.
- Apply mathematical formulas to compute insurance company refunds based on short-rate cancellations.
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