Table of Contents

Lost Policy Release (LPR): What It Is, How It Works

By

Julia Kagan

Updated November 03, 2025

Reviewed by

Eric Estevez

Fact checked by

Yarilet Perez

Definition

A lost policy release (LPR) is a statement releasing an insurance company from its liabilities.

What Is a Lost Policy Release (LPR)?

A lost policy release (LPR) is a formal insurance statement. When signed by the insured party, it frees an insurance company from its liabilities and signifies that the policy in question has been lost or canceled.

Historically, to cancel an insurance policy, the insured had to provide the original documents from when the policy was issued.

Most modern insurance policy cancellations happen without LPRs, except in cases such as changing auto insurance providers.

Three types of cancellations are related to lost policy releases: flat, pro rata, and short rate. Each has a different impact on refunds.

Key Takeaways

A lost policy release (LPR) is a document that releases an insurer from liabilities when a policy is lost or canceled.
Originally, policy cancellation required returning the original documents, but this is no longer needed for most modern insurance processes.
LPRs might still be used in specific situations, such as when switching auto insurance providers.
Three types of cancellations can be associated with LPRs: flat, pro rata, and short rate, each affecting refunds differently.
Signing an LPR releases the insurer from future claim responsibilities after the policy's cancellation date.

How Lost Policy Releases (LPRs) Fit into Modern Insurance

Lost policy releases often use standard language from the past. These releases offer options to either release or cancel a policy. Despite sounding different, both options mean the same thing.

Most modern insurance cases don't need LPRs or the return of the original documents.

An exception is an auto insurer, which may require a lost policy release if a policyholder switches providers. After signing, the insurer isn't liable for losses, and the form is likely completed online.

How It Works

Historically, an insured party who wanted to cancel an insurance policy would have to produce the original insurance documents that the insurance company created when the policy was underwritten. If the policy was lost or misplaced, the insured would then have to demonstrate that the policy is still being canceled, and this was done with a lost policy release (LPR). The LPR indicates that the policyholder is canceling the policy on purpose.

Exploring Types of Cancellation and Lost Policy Releases

When filling out the lost policy release, also called a “cancellation/lost policy release,” the insured typically chooses between three types of cancellations: flat, pro rata, and short rate.

Flat cancellations are used when the insurer was never exposed to risk because the coverage never went into effect. In this case, the premium is often refunded in full.

If an insurance policy is canceled before it expires, the insured may be eligible to receive a portion or all of the remaining unearned premium held by the insurer. This is called a pro rata cancellation. The unearned premium represents the money that an insurer has collected from the sale of the policy, but which is set aside to cover the liability created when the policy was underwritten.

Short rate cancellations are used when the insured fails to pay premiums and the insurance company requests that the policy be canceled. Lost policy releases may also be used if an insurer issues a replacement policy. Once a lost policy release is signed, the insurer is no longer responsible for any claims made after the cancellation date on the policy being replaced. However, in such instances, it may be smart to retain old policy documents in case an issue arises regarding the replacement insurance policy.

The Bottom Line

A lost policy release (LPR) is a statement that releases an insurance company from its liabilities when an insurance policy is lost or canceled.

LPRs are largely unnecessary today due to digital transactions and policy handling, but some insurers (like auto insurance) might still use them in specific cases.

It's important to know the three different types of cancellations—flat, pro rata, and short rate—to know what to expect in terms of refunds.

While lost policy releases are less common now, policyholders should understand their implications and retain old policy documents in case of an issue with a replacement policy.

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