Create a cancellation endorsement to cancel a policy
- Producers [/ Underwriters]
Last Updated: September 2020
This article explains how to create a cancellation endorsement
Note: Unlike regular endorsements, Cancellation Endorsements do not require you to issue 'Endorsement 0' first.
Creating a Cancellation Endorsement
- Navigate to a Policy and select the Endorsements tab.
- On the left, click Cancel Policy.
The Endorsement pop-up opens.
- Fill in the fields to populate the endorsement document. The Endorsement Type is set to Cancellation by default.
- You will be asked to enter a description. The text entered into the Description field is pulled and printed on the endorsement document.
- Click Continue to Editor.
The Policy Cancellation page opens. This page lets you set the cancellation calculation method and the return premium so the cancellation invoice can be generated.
- Under Short Term Premium Method, use the drop-down to select the cancellation calculation method. Options include Flat, Pro-rata and short-term.
Flat: the cancellation of an insurance policy or bond as of its effective date, before the insurer has assumed liability. This requires the return of paid premium in full since the insured has never been covered under the policy
Pro-rata: A full refund of any unearned premiums. This amount is proportional to the amount of time remaining on the policy.
Short-term: A short rate cancellation is the same as a pro rata refund minus some administrative costs or minimum retained premium. Typically a result of an insured electing to cancel.
- Fill in the premium details.
Note: For Return Premiums, use a negative sign (-) when entering the premium. After the premium details are entered, the return taxes and fees are automatically calculated.
- Verify that the return premium details are accurate, then click Save Endorsement on the bottom right.