Definition:
 

Policy Cancellation

When a policy is cancelled, it is terminated before the end of coverage date as stated on the policy.

Policy Cancellation

When a policy is cancelled, it is terminated before the end of coverage date as stated on the policy. When a policy is cancelled the policyholder may be entitled to a refund of unused premiums, although this may be prorated and some insurance carriers may charge a cancellation fee. Insurance carriers must provide notification ahead of time when canceling a policy. Most commonly, an insurance policy is cancelled because of misrepresentation of material facts or significant changes in risk that render the current policy unsuitable.

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