Pro Rata

What Does Pro Rata Mean?

Insuranceopedia Explains Pro Rata

For example, if a policyholder has $100,000 worth of property insurance coverage for a house valued at $200,000, the coverage represents 50% of the property’s total value. In a pro rata arrangement, the reimbursement would be proportional to the coverage. So, if the homeowner files a claim for $50,000 in damages, they would receive only $25,000, reflecting the 50% coverage of the total value.