Return Premium Endorsement
What is an Return Premium Endorsement?
An endorsement for the amount due the insured if the actual cost of a policy is less than what the insured has previously paid—for example, if the limits are reduced, the estimated exposure at inception is greater than the audited exposure, or the policy is canceled.
Understanding Return Premium Endorsement
Unlike an admitted carrier, non-admitted carriers are not backed by the state. They are not required to sell policies that adhere to the same standards as admitted carriers. However, non-admitted carriers are often still regulated by states they do business in.
Due to these less rigid standards, non-admitted carriers have more flexibility when designing coverage, selling policies, and writing risks. Companies that are struggling to find coverage in the admitted market often have more success in the non-admitted market.