Home / Glossary / Premium adjustment
Premium adjustment
Boat insurance term, area: Premium
A premium adjustment is a change to the price of a policy that is already running, while the cover itself stays the same. It does not follow one owner's own claims record. Instead the insurer recalculates the rate for a whole group of comparable risks, so a run of storm years that drains the market's claims funds can lift the price for every boat in that group, including one that has never been damaged. Most conditions set a threshold, often five per cent, below which nothing moves, and they allow the policyholder a short window to cancel when the price rises while the cover stays put.
What to check: Does your policy allow the premium to be adjusted for a whole portfolio, and what threshold has to be passed before it may rise? If it does rise while the cover stays unchanged, how many days do you have to cancel, and from what date does the cancellation take effect?
Related topics
More terms
A general explanation in our own words.
What applies to you is set only by the wording of your own policy.
