Deposit or provisional premium is the amount an insured pays up front while final underwriting and exact premium calculation are still in progress.
The insurer issues a provisional charge when risk is not fully priced yet, then later issues an adjustment once full exposure, limits, and endorsements are finalized.
Claims and accounting implication
Because the provisional amount may be adjusted, policies should clearly state how reconciliation happens and when additional premium becomes due or refundable credits apply.
Practical example
An insurer may bill a 40% deposit at policy inception for a high-value commercial package. After underwriting finalizes hazard class and deductible terms, the policy is endorsed and the remaining 60% is billed with a short due date.