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INSURANCE

Prorated Calculator for Insurance

Most calculators stop at the unused premium. This one keeps going — through the short-rate penalty, the minimum-earned clause, and the fees — to estimate what actually reaches your account.

Estimate what you actually get back Leave the penalty, minimum-earned, and fee fields blank if you don't know them — the range widens to show the uncertainty instead of hiding it.

Start from a common case:
$
Who canceled the policy?
%
%
$
Day-count basis and endpoint counting

Day-count basis

— why your number might differ

Counts the real number of days in both the period and the part you used. Leap years count Feb 29 automatically.

If your insurer counts the cancellation day as already used, choose Exclusive to leave it out of the unused days.

Count both the first and last day?
You are likely to get back
— – —
Enter your premium and policy dates to see the range and every deduction behind it.

This is an estimate, not a quote. The minimum-earned percentage, your insurer's short-rate factor, and the fee schedule are set by your policy and your state — confirm all three with your insurer before treating any figure here as what you are owed.

— of the term is unused — that share of your premium is what the refund is calculated from, before any deduction.
Calculation method Every deduction, in the order it is applied

    The steps fill in with your own numbers as soon as you enter your policy dates. Figures shown are illustrative; your policy documents are the final word.

    Plain language

    Unused premium is not the same as your refund

    Calculate the unused part of your premium and you have a number that feels like your refund. It usually is not. That figure is what the insurer has not yet earned — the starting point for the calculation, not the end of it. What actually reaches your account is that number minus a possible early-cancellation penalty, capped by any minimum-earned clause in your policy, minus fees that were never refundable in the first place. A general pro rata calculator gives you the first number. This page is about the distance between it and the last one.

    ▲ The clause most people have never heard of

    Minimum-earned premium is the quiet one. A short-rate penalty scales with how early you cancel, so it feels proportional. A minimum-earned clause does not — it lets the insurer keep a fixed share of the premium even if you cancel in the first week. On a policy with a 25% minimum-earned clause, canceling on day three and canceling on day eighty can produce the same refund. If your refund came back far smaller than any proportional math explains, this clause is the first place to look.

    How it's calculated

    Four steps, in this order

    Refund ≈ min[ (unused premium × (1 − penalty)) , (premium × (1 − min earned)) ] − fees

    Order matters. The penalty is a percentage of the refund; the minimum-earned clause is a ceiling on the refund. Applying the penalty first and then testing the ceiling against the result is what stops the two from being double-counted — a mistake that produces a refund lower than either clause alone would justify. Fees come off last, because they are not premium at all.

    A worked example

    A $1,200 twelve-month car policy, canceled by you on day 100, Actual/365 with the cancellation day excluded. That leaves 265 unused days, so the unused premium is $1,200 ÷ 365 × 265 ≈ $871 — and that is the figure most calculators hand you. Now apply a 10% short-rate penalty and it becomes about $784. Check a 25% minimum-earned clause: the insurer must keep at least $300, capping any refund at $900, and $784 is already below that, so it does not bite. Finally subtract a $25 policy fee. You are looking at roughly $759 against an unused premium of $871 — a gap of $112 that has nothing to do with the dates. Change the minimum-earned clause to 40% and the picture flips: the cap drops to $720, it now binds harder than the penalty, and the penalty stops being the thing costing you money.

    If you only need the penalty side of this, the pro rata cancellation calculator shows the pro rata and short-rate figures side by side. If your insurer canceled and you just need the clean proportional refund, use the pro rata insurance refund calculator.

    Questions

    Frequently asked

    Why is my insurance refund so much smaller than the unused premium?
    Because the unused premium is only the starting point. Three things come off it before the money reaches you: a short-rate penalty for canceling early, a minimum-earned premium clause that lets the insurer keep a fixed share of the premium no matter when you cancel, and non-refundable policy or broker fees. A refund that looks wrong is usually one of those three, not an arithmetic mistake. Enter each one above and the steps show which of them is actually costing you the money.
    What is a minimum-earned premium?
    It is a clause saying the insurer keeps at least a set percentage of the premium once the policy has started, regardless of how few days you used. If your policy has a 25% minimum-earned clause on a $1,200 premium, the insurer keeps at least $300 and your refund can never exceed $900 — even if you cancel in week one. It is common on non-standard auto, contractor, and specialty policies, and it is one of the most common reasons a refund lands far below what a plain pro rata calculator predicts.
    How is a minimum-earned premium different from a short-rate penalty?
    A short-rate penalty is a percentage taken off your refund. A minimum-earned premium is a ceiling on the refund itself. They can both apply, and when they do the harsher one decides your number — that is why this calculator applies the penalty first and then tests the minimum-earned ceiling against the result, rather than stacking them blindly.
    Do I get a full refund if my insurance company cancels the policy?
    Usually yes. When the insurer cancels mid-term, the standard US treatment is a full pro rata refund with no short-rate penalty, and a minimum-earned clause is often waived too — though not always, so check your policy. Set "who canceled" above to the insurer and the calculator drops both deductions, which makes that result the no-clause upper case rather than a promise. Fees may still be kept, since a fee is not a cancellation penalty. Note that non-renewal is different: the policy simply runs to its end date, so there is no unused premium and no refund. Your policy and your state rules are the final word.
    Why does this calculator give a range instead of one number?
    Because the exact figures that decide your refund live in your policy, not in the dates. The minimum-earned percentage, the insurer's short-rate table, and the fee schedule are all policy-specific, and most people do not have them on hand when they are trying to figure out what they are owed. Showing one precise number would be false confidence. The top of the range is your unused premium with no penalty; the bottom carries every deduction you entered. Your real figure sits between them.
    Are non-refundable fees legal on an insurance refund?
    Policy fees, broker fees, and installment fees are commonly non-refundable and that is generally permitted, though what may be charged is regulated state by state and generally must be disclosed to you in writing. They are separate from the premium, which is why this calculator subtracts them last, after the proportional math is done.
    What should I do if my refund is lower than this range?
    Ask your insurer in writing for three specific things: the earned premium calculation, the short-rate factor or minimum-earned percentage they applied, and an itemized list of any fees retained. Those three answers account for nearly every gap. If the figures still do not reconcile, your state Department of Insurance handles refund disputes. This page is general information, not legal or financial advice.
    Does the day-count basis change my refund?
    It changes the starting figure, sometimes by a few dollars and occasionally by more across a leap year. The unused premium depends on how days are counted — Actual/365, a 360-day banking basis, or 30/360. If your insurer's number is close but not identical to the top of this range, switch the basis above before assuming a penalty is involved.

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