Retain

To retain is to hold onto something. The insurance answer is a retained premium is a stated amount shown on the policy declaration. The retained amount is the minimum charge for that policy no matter now long a period that you have the policy.

A business that might have a retained premium would be a snow removal company. Since the income is going to be based around the winter season a person might be tempted to only purchase insurance for those months that snow removal is likely to be needed. So it is likely that 50% or more would be retained on this policy.

An insurance company will show a retained premium on most of their policies. An automobile policy can have a $100 retained premium and this could affect your decision to change insurance companies. Another penalty that could affect your decision to change companies in the middle of your term is being charged a set percentage of the annual premium such as 8-9% for a three day policy.

When a payment plan is set up you will likely have to pay the retained premium as down payment even though it is significantly higher then the usual 1/6 down payment. Consult with your agent or broker regarding the practices of your insurance company.