unearned premium

unearned premium definition - business

unearned premium

In insurance, the portion of a premium that is applicable to the unexpired part of the insurance term. For example, a casualty insurance company receives an annual premium from a customer purchasing a homeowner's policy. After three months of coverage, three-quarters of the premium remains unearned. Compare earned premium.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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