Earned Premium

This reflects the portion of a premium which is the property of an insurance company. This is based on the expired portion of the policy period. E.g., a $400 premium for a one-year policy beginning January 1 would amount to an earned premium of $200 July 1.

This is the money owed for the protection that has been provided by the insuring company. This is not the retained premium - a minimum amount that will be charged for time of policy even if the time is less then the rate per day earned. It is important to be aware if there is a retained premium when you first purchase your policy.

It is also important that you be aware that until you actually cancel a policy with a handwritten signature provided to the agent, broker or insurer, you will be charge a premium for the time on risk (TOR) or earned premium.