premium proration

**premium proration**

Premium proration refers to the process of adjusting insurance premiums based on the coverage period. When a policyholder makes changes to their insurance plan-such as starting, canceling, or modifying coverage partway through a billing cycle-the premium is recalculated to reflect only the portion of time the coverage was active. This ensures customers pay a fair amount that corresponds directly to their actual coverage duration. Premium proration is commonly used in various insurance products, including health, auto, and property insurance, providing flexibility and transparency in premium billing.