Pro-rata is a Latin term meaning in proportion. In the insurance world, it refers to a method of calculating payments or adjustments based on a specific proportion or ratio.
Here are some common applications of pro rata in insurance:
In essence, pro-rata calculations ensure fairness and accuracy in insurance transactions. By understanding the concept of pro rata, you can better manage your insurance coverage and make informed decisions.
At PSIC, we strive to be fair and transparent in all our dealings. Sometimes, situations arise where a pro-rata calculation is necessary. This typically happens when there’s a change in your policy, such as a change in coverage, a policy cancellation, or a policy start date that doesn’t align with the beginning of a month.
A pro-rata calculation ensures that you pay only for the exact coverage you receive. For example, if your policy starts mid-month, you’ll only pay a portion of the monthly premium. Similarly, if you decide to cancel your policy before the end of the term, you’ll receive a pro-rata refund for the unused portion of the policy.
We understand that insurance can be complex, and we’re committed to making the process as clear and straightforward as possible. If you have any questions about pro-rata calculations or your policy, please contact your insurance agent. They can provide personalized guidance and help you understand your options.
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