What type of cancellation results in no charge for the unused portion of the policy?

Flat cancellation occurs when a policyholder cancels their insurance policy, typically within a specific time frame, such as the first few days after the policy has gone into effect. In this situation, the insurer is able to return the entire premium without any charges or penalties. This method is especially advantageous for policyholders because they are not held responsible for any portion of the premium once the policy is canceled during the designated timeframe, resulting in no financial loss for the unused portion.

This cancellation type is straightforward as no risks have been covered, and the insurer doesn't incur costs that would warrant retaining a portion of the premium. It allows both parties to terminate the agreement without any financial consequences associated with the cancellation of coverage.