Find the premium refund due to Keona after she canceled a fire insurance policy

Question

Find the premium refund due to Keona after she canceled a fire insurance policy that had been in force for only 2 months. Her annual premium was $427.00. Use the short-rate premium factors in Table 19-5 from your text. (Round your answer to the nearest cent)

  
a,) $157.58

      
b.) $225.00

      
c.) $384.60

      
d.) $298.90

SECTION ll. PROPERTY INSURANCE Property Insurance Short-Rate Schedule Percent of Time Policy Time Policy Annual Is in Force Is in Force Premium (months) 5 days 10 days 15 days 14 20 days 25 days 1 month 2 months 12 3 months 653 contemporary Mathematics for Business & Consumers A Percent of Annual Premium 75 90 100

Explanation / Answer

Keona's yearly premium = $427

Time period of premium = 2 months

Percent of annual premium (from the table) = 30

Therefore, the total premium in force during the period = 30/100 * 427 = $128.10

=> Premium refund = $427 - $128.10

= $298.90

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