A mid-term adjustment is a change made to an insurance policy during its term rather than at renewal, such as updating an address, adding a driver or changing a vehicle. It can alter the premium and may carry an administration fee.
In one line: A mid-term adjustment is any change made to a policy partway through its term.
How a mid-term adjustment works
Policyholders make a mid-term adjustment when their circumstances change, for example moving home, adding a named driver or modifying the insured car. The insurer reassesses the risk and recalculates the premium accordingly.
Adding a named driver halfway through a 600 GBP annual policy might increase the cost by 120 GBP for the remaining six months, and the insurer may also charge an administration fee of around 25 GBP for processing the change.
Some changes reduce the premium and produce a partial refund, while failing to report a relevant change can void the cover.
Mid-term adjustment vs renewal
A mid-term adjustment happens during the policy year and changes the existing contract. A renewal is the offer of a fresh policy at the end of the term, with its own new premium.
Material changes such as a new address must be reported promptly, because waiting until renewal can leave the policy inaccurate and at risk of being voided.
Primary source: FCA: Insurance