Final answer:
Cancellation is the termination of an insurance policy before its expiration date, distinct from nonrenewal, abandonment, and subrogation.
Step-by-step explanation:
The termination of an insurance policy before the expiration date is known as a cancellation. This can occur for various reasons, such as non-payment of premiums, fraud, material misrepresentation, or mutual agreement between the insurer and the insured. It is important to distinguish between cancellation and nonrenewal; the former refers to the termination of an insurance policy during the policy term, while the latter refers to the insurer's decision not to renew the policy once its term expires. Abandonment is not a term typically used in relation to the active termination of an insurance policy, and subrogation is a completely different concept where an insurer seeks reimbursement from the third party responsible for a loss after paying a claim to their insured.