How long must an Insured wait to receive a short-rate refund of unearned premium after their cancellation?

The correct waiting period for an insured to receive a short-rate refund of unearned premium after cancellation is 30 days. This timeframe is established to ensure that the insurer has adequate time to process the cancellation and calculate any refund due to the insured.

Typically, in property and casualty insurance, a short-rate cancellation means that the insured will receive a refund, but it may be less than the total unearned premium because the insurer assesses a fee to cover administrative costs associated with the early termination of the policy. The 30-day period accounts for various operational procedures needed to finalize the cancellation and issue the refund, such as ensuring all paperwork is completed and that the refund amount is correctly determined.

By adhering to this timeline, both the insurer and the insured can manage their financial and administrative responsibilities effectively, ensuring a clear understanding of the cancellation policies and any associated refunds.