Insurance Pro Rata Calculator
Work out a pro rata or short-rate refund when a policy is cancelled mid-term, and the prorated premium for a mid-term change. The day count is shown, so you can explain the number on the call. An estimate, not insurance advice: the policy and the insurer's rules decide.
Your numbers
If the policy keeps a minimum amount whatever the dates, enter it.
Paid on top of the premium and kept by the insurer or agency.
Most calculations use the actual days. Some insurers divide a one-year term by 365 even when it includes 29 February.
The expiration date on the declarations page.
The start date is a flat cancellation: nothing used, everything returned.
Return premium (refund)
–
- Earned premium (kept)
- –
- Days in the term
- –
- Days used
- –
- Days unused
- –
- Pro rata factor
- –
An estimate, not insurance advice: the policy and the insurer's rules decide.
The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.
How pro rata cancellation works
The insurer keeps the premium for the days the policy was in force and returns the rest. Return premium = term premium × days unused ÷ days in the term. The calculator counts actual calendar days: a policy from January 1, 2026 to January 1, 2027 runs 365 days, a one-year term that includes February 29 runs 366, and a six-month policy is its own length.
Worked example: a $1,200 annual policy starting January 1, 2026 is cancelled on July 1, 2026. 181 days were used and 184 are left, so the return premium is $1,200 × 184 ÷ 365 = $604.93, and the earned premium the insurer keeps is $595.07. The days are shown with the result so you can walk the client through the number.
Pro rata, short rate and flat cancellation in plain words
Pro rata is the method with no penalty: the client gets back exactly the unused share of the premium.
Short rate keeps an extra amount on top of the earned premium and is often used when the policyholder asks to cancel. Some insurers use a published short-rate table; another method keeps a percent of the unearned premium, 10% in the method sometimes called 90% pro rata. On the example above, 10% of $604.93 is $60.49, so the refund is $544.44. The calculator uses the percent method with a percent you can change; if the policy has a short-rate table, the table decides.
A flat cancellation cancels the policy from its start date, as if it never took effect: no days used, the whole premium returned. Enter the start date as the cancellation date to see it. Whether a policy can be cancelled flat depends on the policy and the insurer.
Mid-term changes (endorsements)
When coverage changes partway through the term (a new driver, a higher limit, a vehicle sold), the carrier rates the policy at the new premium for the days that are left. Adjustment = (new term premium − old term premium) × days remaining ÷ days in the term.
Raising a $1,200 annual premium to $1,500 on July 1, 2026 leaves 184 of 365 days, so the client pays $300 × 184 ÷ 365 = $151.23 more, and the premium for the whole term becomes $1,351.23. A decrease to $900 on the same date returns $151.23. Enter both premiums as full-term premiums, the way the carrier quotes them.
Minimum earned premium and fees
Some policies carry a minimum earned premium: an amount the insurer keeps however early the policy is cancelled. If the pro rata earned premium is lower, the refund is reduced so the minimum is kept. The amount, if any, is written in the policy; the calculator does not assume one.
Policy fees, inspection fees and agency fees may not be refunded. Enter a non-refundable fee and it is shown as kept, separate from the premium. Check the declarations page and the carrier's rules for which charges come back.
An estimate, not insurance advice: the policy and the insurer's rules decide. Check the policy wording and the carrier before you quote a refund to a client.
Source for the method names, read October 2026:
Counting days for something else? The time duration calculator works out the days between two dates, and the percentage increase calculator shows a renewal increase as a percent.
For the client conversation: Insurance agent client notes, Insurance sales tips for face-to-face agents.
The refund is one number. The reason is on the call.
A cancellation or a coverage change usually comes up on a client call. ParrotNotes records the conversation (with permission) and gives you the summary and follow-ups, so the reason, the effective date and what you promised are on file. Free for 100 minutes of recording a month.
Get ParrotNotes freeRelated tools
- Discount CalculatorGet the sale price and the savings from a percent off, find the percent from two prices, and stack two discounts to see the real total.Open the tool
- Percentage Increase CalculatorWork out the percentage increase or decrease between two numbers, add a percent to a number, or find the original value before a change.Open the tool
- Time Duration CalculatorFind the hours and minutes between two times or two dates, across midnight, and add or subtract time from a start time.Open the tool
- Commission CalculatorWork out sales commission at a flat rate, on a tiered plan applied bracket by bracket, or split with a team, with monthly and yearly totals.Open the tool