Commercial Mid Term Cancel Fees

[insurance1822]

Are there typically cancellation fees for switching commercial policies (auto, BOP, Package..) mid term? I know WC has them, but what about everything else. Is there a standard here?

 

[AZDave]

Yes, commercial policies are subject to short rate cancellation penalty, if the insured cancels. Pretty sure they are all the same. The earlier in the term, the higher the penalty. There are online tools to calculate the refund.

Pro Rate if policy cancels for non pay....

 

[hesse]

Here in the Midwest most don't short rate a policy they will flat cancel. However there are a few that short rate

 

[Arnage150]

Let is cancel for non pay and it will be pro rata.
Also read the cancellation clause in the policy. Some times you can find an out. ie, they need contractual liability and the current carrier can not supply it so they will cancel pro rata.

 

[nyc2phi]

Most direct writers don't have a cancellation fee, some MGA's might have 25% earned but I rarely see a penalty for canceling mid-term anymore, even with WC.

 

[XdateNotSexDate]

Usually 10% short rate applied to unearned Comm Auto premium but that is it besides WC.

I think Arnage150 has given the best advice - just let it go down for non-pay and they'll prorate everything.

 

[stex]

In California, most standard carriers pro-rate now. Most surplus is 10% on unearned premium - of course there's also a typical 25% minimum earned.

 

[Indiana_Adam]

Not in Indiana with most standard carriers. For non-standard, usually 25% flat cancellation. So free and clear after 3 months.

 

[ericinsures]

Let is cancel for non pay and it will be pro rata. Also read the cancellation clause in the policy. Some times you can find an out. ie, they need contractual liability and the current carrier can not supply it so they will cancel pro rata.

saving this good info