Additional Premium Law and Legal Definition

Additional premium is an additional payment required of a mortgagor for the privilege of paying the principal in advance, thereby stopping the accumulation of interest. The term is also used to designate the increase in premium payable by the insured as a result of policy amendment that may have increased the risk or changed the policy conditions or sum insured. It is payable under an insurance policy when additional coverage is given. For example, additional premium paid where coverage for loss by hail is added to a policy otherwise insuring only against loss from fire and windstorm.