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Free Pro Rata Insurance Calculator: Unearned Premium & Refund

Enter your premium, policy dates and cancellation date to see how much of the premium is unearned and what you might get back. Every step of the calculation is shown.

  • Exact day count: leap years are handled and your time zone cannot change the result.
  • Shows the unearned premium and the estimated refund separately, after what you have paid and any fees.
  • Pro rata by default. Short-rate only with the penalty or earned percentage from your own policy.

Cancellation details

Label only. Amounts are never converted.
The whole term, not a monthly payment. Example: 1,200.00
The day cover stops, as shown on your policy documents.
The date cover ends, not the date you asked. Confirm it with your insurer.
By default cover ends at the start of the cancellation date, the usual 12:01 a.m. convention. Choose “Counted” if your insurer counts that day.
Policy terms that change the refund (optional)
A flat fee charged by the insurer, if your policy has one.
The least the insurer keeps if you cancel early, if your policy states one.

Calculated in your browser. Your amounts and dates are not sent anywhere.

Result

Enter the premium and the three dates to see the result.

Guide

When you cancel an insurance policy before it ends, the insurer keeps the part of the premium that covers the time you were insured and may return the rest. This calculator shows that split and explains each number.

How to use the pro rata insurance calculator

  1. Enter the premium for the whole term
    Use the total for the full policy period, not a monthly payment. Include taxes or fees only if your insurer refunds them pro rata.
  2. Enter the policy start and end dates
    Copy them from your declarations page. The end date is the day cover stops. The 6 and 12 month buttons fill it in for standard terms.
  3. Enter the cancellation effective date
    This is when cover actually ends, which may differ from the day you asked. Get it confirmed in writing.
  4. Add payments, fees or short-rate terms if they apply
    Open the optional policy terms to enter what you have paid so far, a cancellation fee, a minimum earned premium or the short-rate terms in your policy.

How the calculation works

The calculator uses straight-line (daily) proration, the usual starting point for a pro rata refund:

  • Policy term days = end date − start date.
  • Days used = cancellation date − start date. By default the cancellation day itself is not counted.
  • Days remaining = term days − days used.
  • Unearned premium = total premium × days remaining ÷ term days.
  • Earned premium = total premium − unearned premium.
  • Estimated refund = premium paid − earned premium − any cancellation fee. If this is negative, it is shown as a balance you may owe.

Which days are counted

Many policies run from 12:01 a.m. on the start date to 12:01 a.m. on the end date. California, for example, requires policy forms to state an inception hour of 12:01 a.m. On that basis, a cancellation effective on a given date means cover ended at the start of that day, which is the calculator’s default. Some insurers and regulators count the effective date as a day of cover instead. The Texas Department of Insurance’s worked example treats February 19 as day 50 of the policy. Choose the option that matches your insurer’s statement.

The term length is the actual number of days, 365 or 366, so leap years are handled. A carrier that rates on a fixed 365-day or 360-day basis can produce a slightly different figure. The calculator uses calendar dates only, so your device’s time zone and daylight saving changes cannot move a day.

Worked examples

Each result below is the exact value rounded once to the nearest cent.

Case Inputs Result
Annual policy, paid in full Premium 1,200.00. Term 1 Jan 2026 to 1 Jan 2027 (365 days). Canceled 1 Apr 2026: 90 days used, 275 remaining. Unearned 1,200.00 × 275 ÷ 365 = 904.11. Earned 295.89. Refund 904.11.
Leap-year term Premium 1,000.00. Term 1 Jan 2024 to 1 Jan 2025 (366 days). Canceled 1 Jul 2024: 182 days used, 184 remaining. Unearned 1,000.00 × 184 ÷ 366 = 502.73. Earned 497.27.
Installments and a fee First example, but only 600.00 paid so far and a 25.00 cancellation fee. Earned 295.89. Refund 600.00 − 295.89 − 25.00 = 279.11.
Short-rate, illustration only First example, assuming a policy clause that lets the insurer keep 10% of the unearned premium. Insurer keeps 90.41. Refund 904.11 − 90.41 = 813.70. The 10% is an example, not a standard.

Pro rata vs short-rate cancellation

Both start from the unearned premium. They differ in how much of it you get back.

Pro rata Short-rate
Refund The unused share of the premium, with no penalty. The unused share minus a penalty, so the refund is smaller.
How it is set Days remaining ÷ days in the term. By the policy: a percentage of the unearned premium or a short-rate table.
When it usually applies When the insurer cancels, and in many personal policies when you cancel. Mainly when the policyholder cancels, if the policy says so.

IRMI describes the short-rate penalty as a disincentive to cancel early, calculated either from a short-rate table in the policy or by applying a stated percentage penalty to the pro rata figure, for example 10 percent. One broker’s calculator describes the common “90% of pro rata” method, which keeps 10% of the unearned premium.

United States

The NAIC’s Improper Termination Practices Model Act says a policy shall not be canceled on other than a pro rata basis unless the policy form provides for another basis, and that a producer must first tell the insured in writing about the extra cost of a non-pro-rata cancellation. It is a model act, not a law, and states differ. Texas now requires unearned premium on personal auto and residential property policies to be refunded pro rata, bans short-rate on them, and still allows a minimum retained premium, under a rule the Texas Department of Insurance said takes effect on 1 September 2026.

Canada

Some Canadian insurers apply a short-rate scale when the policyholder cancels before expiry, and pro rata when the insurer cancels. Rules and wording vary by province and by policy, so this calculator does not assume a short-rate figure. If your policy gives one, enter it. Otherwise ask your broker for the exact refund before you cancel.

United Kingdom

Under the FCA’s ICOBS rules you can cancel most insurance within 14 days (30 days for pure protection and payment protection policies) without penalty. If you cancel in that period, the insurer may charge only for cover already provided, which the FCA expects to be a pro rata share, plus reasonable costs of setting up the policy with no element of profit. Later in the term, your policy terms and any disclosed cancellation fee apply, so check your policy booklet and the key facts document.

Why your insurer’s refund may differ

  • A minimum earned premium or a cancellation fee in the policy.
  • A short-rate penalty or a different day-count convention.
  • Installments: you may have paid less than the premium earned so far, or the plan may carry finance charges this calculator does not model.
  • Taxes, policy fees or add-ons that are not refundable.
  • Premium that is adjusted after the fact, for example after an audit, a claim or a change to the policy.

Ask for a written cancellation statement. If it differs from this estimate, the statement shows which of these applies.

Limits of this calculator

It gives an estimate from the numbers you enter. It does not know your policy wording, does not read your documents and cannot tell whether you are entitled to a refund. It does not model premium finance agreements, policies with several coverages or exposure bases, or audited premiums. It is general information, not legal, financial or insurance advice.

Frequently Asked Questions

A pro rata refund returns the part of the premium that covers the time left on the policy. If you paid for 365 days and cover ends with 275 days to go, you are refunded 275⁄365 of the premium, with no penalty. Insurers may still deduct fees or a minimum earned premium, so the amount that reaches you can be lower than the unearned premium.

Count the days in the policy term and the days left after the cancellation date. Divide the days left by the days in the term, then multiply by the total premium. For a 1,200.00 premium on a 365-day term with 275 days left, the unearned premium is 1,200.00 × 275 ÷ 365 = 904.11. Then subtract fees and anything the insurer is entitled to keep.

Pro rata returns the full unused share of the premium. Short-rate returns less, because the insurer keeps a penalty for early cancellation. The penalty is set by the policy, either as a percentage of the unearned premium or through a short-rate table. There is no universal figure, which is why this calculator asks you to enter the one from your policy.

No. A refund depends on how much you have paid, how much premium has been earned, and any fees, minimum earned premium or short-rate terms. If you pay in installments and have paid less than the earned premium, there may be nothing to refund and the insurer may ask for the difference. This calculator shows that case as a balance you may owe.

It depends on the policy and the insurer. Many policies end at 12:01 a.m. on the cancellation date, so that day is not covered and is not counted. Others, and the Texas Department of Insurance’s worked example, count the effective date as a day of cover. The calculator lets you pick either, so you can match your insurer’s statement. One day changes the result by about one day’s premium.

The usual causes are a cancellation fee, a minimum earned premium, a short-rate penalty, a different day-count convention, or installments and non-refundable taxes and fees. Compare your insurer’s cancellation statement line by line with the steps shown under the result, and ask the insurer to explain any line that does not match.

Yes. Choose "Paying in installments", enter the total premium for the full term and the amount you have paid so far. The estimate then compares what you have paid with the premium earned up to the cancellation date. It does not model finance charges or the terms of a separate credit agreement, so check those with your insurer or lender.

The arithmetic is the same everywhere, and you can label amounts in USD, CAD or GBP. The rules are not: refund methods, fees and cancellation rights differ by country, state and province and by policy. The calculator does not apply any local rule on its own, so enter the figures from your policy and check the result with your insurer.

The calculation runs in your browser and your amounts and dates are not sent to our servers or to analytics. We count how often the tool is used and which options are chosen, such as pro rata or short-rate, without recording any of the numbers or dates you enter.

Sources

Rules and formulas on this page were checked against these sources in October 2026. The calculator and this text are maintained by CharCount and have not been reviewed by a licensed insurance professional.