About the Prorated Insurance Premium Calculator
This tool estimates prorated insurance amounts when coverage is canceled, purchased for only part of a term, or changed mid-policy. It is useful for policyholders, agents, and small businesses who want to approximate earned premium, partial-period cost, or a refund/balance before reviewing the insurer’s final bill.
How to use this calculator
- Select the calculation type: cancellation, partial coverage period, or mid-term premium change.
- Choose the proration method: actual policy-term days, 365-day annual rate, or 360-day insurance year.
- Enter the full-term premium, policy start date, policy end date, and amount already paid.
- Enter the date fields required for the selected calculation type, such as cancellation date, partial coverage dates, or change effective date.
- For a mid-term change, enter the new full-term premium.
- Click Calculate Premium to view the prorated premium, daily rate, days used, and estimated refund or amount due.
How it works
The calculator uses straight-line daily proration. It first determines the policy term days from the start date through the end date, treating the end date as a covered day. The daily rate is the full-term premium divided by the selected basis: actual term days, 365 days, or 360 days.
For a cancellation, the cancellation date is treated as the first day not covered, so earned days run from the policy start date up to but not including the cancellation date. Earned premium equals daily rate times earned days, and unearned premium is the remaining portion of the full-term premium.
For partial coverage, the calculator counts the selected partial coverage days that fall within the policy term, including the partial end date. For a mid-term change, it applies the original premium rate before the change effective date and the new premium rate from the change effective date through the policy end.
The amount already paid is compared with the calculated premium due to estimate a refund or balance due. Results are educational estimates and not insurance, legal, or financial advice; actual insurer billing may include fees, taxes, minimum earned premiums, short-rate penalties, installments, or carrier-specific rules.
Example calculation
Suppose a 12-month policy runs from January 1 through December 31 with a $1,200 full-term premium, and the actual-days method is selected. The term has 365 days, so the daily rate is $1,200 ÷ 365 = $3.29. If the policy is canceled on July 1, the calculator counts January 1 through June 30 as 181 earned days, giving an earned premium of about $595.07. If $1,200 was already paid, the estimated refund is $604.93.
Frequently asked questions
Is the cancellation date counted as a covered day?
No. For cancellation calculations, the cancellation date is treated as the first day not covered.
What is the difference between actual days, 365-day, and 360-day methods?
Actual days divides the premium by the number of days in the policy term. The 365-day and 360-day methods divide by fixed annual bases often used for annualized insurance prorations.
Does the calculator include short-rate penalties or policy fees?
No. It uses straight-line daily proration only and excludes penalties, fees, taxes, minimum earned premiums, and insurer-specific adjustments.
Why does my insurer’s refund differ from this estimate?
Insurers may apply policy-specific rules, installment billing, taxes, endorsements, minimum premiums, or short-rate cancellation formulas that are not included here.
How is a mid-term premium change calculated?
The calculator charges the original daily rate for days before the change effective date and the new daily rate from the change effective date through the policy end.