Pro Rata Calculator

Calculate earned and unearned insurance premium using exact policy dates.

Policy-term premium

The total premium for the policy term, not an annual amount. Commas and $ are fine.

Policy start date

Policy end date

Cancellation / as-of date

Does the cancellation date count as a covered day? First day not covered Last covered day

Default: the cancellation date is the first day without coverage.

Load an example

Enter your premium and dates, then choose Calculate to see the day count, factors, formula, and estimated return premium.

How days are counted

The policy end date is the last covered day, and the policy start date is the first covered day. Both are included in the total day count.
By default, the cancellation date is treated as the first day without coverage, so it is not counted as earned. If your policy treats it as the last covered day, switch the option in the calculator.
Days are real calendar days, so a term that crosses February 29 in a leap year counts 366 days for a full year.
Enter the policy-term premium — the actual amount for this specific term — not an annual figure you then prorate by hand.

Worked examples

All three use the default rule (cancellation date = first day not covered). Click a chip above to load any of them into the calculator.

Annual policy. Premium $1,200, term 2026-01-01 to 2026-12-31, cancelled 2026-04-01.

365 total days · 90 earned · 275 unearned → earned premium $295.89, estimated return $904.11.
Leap year. Premium $2,400, term 2028-01-01 to 2028-12-31, cancelled 2028-07-01.

366 total days · 182 earned · 184 unearned → earned premium $1,193.44, estimated return $1,206.56.
Six-month term. Premium $600, term 2026-07-01 to 2026-12-31, cancelled 2026-10-01.

184 total days · 92 earned · 92 unearned → earned premium $300.00, estimated return $300.00.

How a pro rata insurance premium works

When a policy ends before its term, straight-line pro rata allocates premium by covered time. In this estimate, the earned portion corresponds to days already passed, and the unearned portion corresponds to remaining days.

Earned vs. unearned premium

Earned premium is the portion of the premium matching the time the policy was actually in force. Unearned premium is the portion associated with remaining time. Under straight-line pro rata, that amount is this calculator's estimated return premium; the actual amount depends on the policy terms.

The formula

The straight-line daily method uses three numbers from your policy:

daily rate      = policy-term premium ÷ total policy days
earned premium  = policy-term premium × (earned days ÷ total policy days)
return premium  = policy-term premium − earned premium

Total policy days counts every covered calendar day from start through end. Earned days counts the covered days before the cancellation date (under the default rule). This calculator runs that exact math and shows the formula filled in with your own numbers.

Pro rata vs. short-rate cancellation

Straight-line pro rata estimates earned and unearned premium only from the fraction of the policy term used. Short-rate cancellation may apply an additional retention factor, which can reduce the return premium. Which method applies depends on the policy and applicable rules. This tool computes straight-line pro rata only.

Terminology references: IRMI's pro rata cancellation definition and IRMI's short-rate cancellation definition.

Why the insurer's number may differ

An insurer's actual refund can include items this estimate ignores: minimum earned premium floors, cancellation fees, short-rate penalties, taxes, and broker charges. Insurers may also count the cancellation day differently. Treat the result here as a transparent starting point, not a promise of the final check.

Leap years and non-annual terms

The day count follows the real calendar, so a full-year term in 2028 counts 366 days, and a six-month or four-month term counts its actual days. You don't need to adjust anything — enter the real start and end dates and the factors are computed on the true day count.

Common mistakes to avoid

Entering an annual premium for a shorter term. If the policy is six months, enter the six-month premium. Prorating an annual number against a partial term understates the daily rate.
Mismatching the cancellation-day rule. Some policies count the cancellation date as earned, others don't. If your figure is off by one day, switch the option in the calculator.
Expecting the gross pro rata refund to equal the net check. Fees, minimum earned premium, short-rate rules, and taxes can all reduce what you actually receive.
Forgetting leap years. A full-year term in 2028 or 2032 has 366 days, not 365, which slightly changes the daily rate.

Frequently asked questions

How do I calculate a pro rata insurance premium?

Divide the policy-term premium by the total number of covered days to get a daily rate, multiply by the days already earned, and subtract from the total premium to find the unearned (return) premium. This calculator does that for you and shows the full formula with your own numbers.

Is the cancellation date included in earned premium?

By default this calculator treats the cancellation date as the first day without coverage, so it is not counted as earned. If your policy counts the cancellation date as the last covered day, switch the option above and that day becomes earned.

What is the difference between earned and unearned premium?

Earned premium is the portion of the premium that covers time already passed under the policy. Unearned premium is the portion that covers time still remaining, and is what can be returned when a policy is cancelled mid-term.

Is pro rata the same as short rate?

No. Pro rata returns premium strictly by the fraction of time remaining. Short rate applies a penalty or retention factor on top of pro rata, so the refund is usually smaller. This calculator only computes straight-line pro rata, not short rate.

Why is my insurer's refund different from this estimate?

Insurers may apply minimum earned premium rules, cancellation fees, short-rate penalties, taxes, or broker charges, and may count days differently. This tool is a straight-line estimate and does not interpret your policy or promise an exact refund.

Does the calculator handle leap years?

Yes. Day counts use the actual calendar days in your policy term, so a term that includes February 29 counts 366 days for a full leap year rather than 365.