What is the most likely outcome if an insurance premium paid by an insured is determined to be too high during an audit?

When an audit determines that the insurance premium paid by an insured is too high, the most likely outcome is that the insured will receive a return premium. This situation typically arises when the actual exposure or risk experienced by the insured is lower than what was originally estimated when the premium was calculated.

Insurance policies often involve estimates based on projected information about the business or property being insured. If the audit reveals that the business had less risk or exposure than anticipated, the insurer must adjust the premium accordingly. As a result, the insured is entitled to receive a return of the excess premium paid, reflecting the lower risk. This process is part of maintaining fairness within the insurance system, ensuring that insured parties are only charged for the coverage they actually require based on their actual risk profile.

The other outcomes mentioned do not align with the typical responses to an excess premium scenario. For instance, the insured owing additional premium would occur if an audit identified higher risk levels than previously assumed, while cancellation of coverage or penalties would not be routine consequences of a premium adjustment resulting from the audit process.