Additional Premium

An additional premium is charged for an endorsement done to your policy. This is a change that results in a higher charge and must be paid. It is done mid-term, during the period of the policy.

This charge can be for a change in the rating for risk. An example would be that a certain area of homes was rated for having a volunteer fire department and that is no longer true. There could be a mid-term charge for the increased risk. The risk has increased due to the distance that the closest responding fire department will have to drive. This results in a higher loss for fire claims. Another example is that you are now renting out rooms to students in your home. This affects your liability exposure and can change your home from a homeowner's policy to a commercial policy.

Additional premiums can be charged when you substitute a vehicle on your automobile policy. The use of your vehicle is part of how your premium is determined. So if you start commuting to work and did not before then this likely will cause an additional premium.

If you are aware of a change that has occurred since you originally wrote your policy then you have an obligation to notify your broker or agent. If you do not and then suffer a claim you might not have coverage.

If you are on a monthly payment plan then the insurance company does have the right to increase their withdrawals from your account. Ask your broker or agent for an estimated amount for any changes so that you are aware of a revision coming that will require payment once processed.