Chapter 4 Flashcards
1
Q
What is the purpose of a renewal notice?
A
A renewal notice informs the insured that their insurance contract is about to come to an end and invites them to renew the policy. The renewal notice contains the renewal premium and any proposed changes in the terms and conditions.
2
Q
If a policyholder cancelled their policy mid-term, why would an insurer often charge short-period rates for the period of cover?
A
The administration rates incurred in setting up the policy are high and the policyholder would be considered to have cost the common pool more than average and is, therefore, often charged more than simple pro-rated charges.
