Pro-rata

Plain English Definition: A proportional distribution based on a predetermined formula.

What Pro-rata really means for someone with an insurance policy

Pro-rata distribution applies when refunds, costs, or coverage are divided based on actual usage or time covered.

Pro-rata Real World Examples

• If you cancel your policy halfway through the term, you receive a pro-rata refund.
• Your premium is adjusted pro-rata when you add coverage mid-term.
• Pro-rata liability sharing occurs when multiple insurers cover the same loss.