BindHQ supports pro-rated return premiums on endorsements and cancellations to generate accurate, comprehensive invoices.
Last Updated: September 2020
This article explains how a pro-rata factor is applied to determine the pro-rated bill or refund on an existing Policy.
- Changes to coverage often require pro-rated premiums so the insured is only billed or reimbursed for the portion of their term the coverage change applies to.
- In BindHQ, the Pro Rata Factor is automatically calculated depending on how far into a term the endorsement or cancellation is created.
- The Pro Rata Factor is multiplied by the annual value of the endorsement premium to determine the pro-rated bill or refund.
- This value is based only on the line items in the Coverage section of an Application or Policy; it does not take into account any line items from the Invoice section.
Note: The system does not currently support mixing fully earned additional premiums (like Additional Insured) and pro-rated premiums. All additional or return premiums are calculated in the Pro Rata Factor.