Cancellation of the insurance contract with the premiums adjusted to reflect the amount of time the contract has been in effect.
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REFERENCE: See: Cancellation.
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When an insurance contract is terminated mid-term by an insurer, the return premium will usually be calculated on a pro rata basis. For example this means that if a 12 month contract is cancelled 4 months before its expected expiry date then the insured would receive back 4/12 of its premium.

A clause stipulating that the insurance policy must pay out to each of the subjects of insurance proportionally according to the value each item holds in relation to all of the property items covered in that form.

A clause stipulating that any loss will be paid proportionally, according to the amount of coverage it provides in relation to the total amount of coverage provided by all policies taken on the same risk.

A certain portion of every risk is ceded under a proportional agreement. The insurer and reinsurer agree to share a portion of all insurance, premium, and losses in the same amount. The insurer is paid a commission for ceding the risk portion and premium to the reinsurer.

The rate for a shorter term than the usual contract period.

Any kind of reinsurance under which the reinsurer shares losses and premiums with the ceding company.

In proportion.

A division of loss according to the interest of the various companies providing insurance; thus, if Company A has insured the property involved for Rs. 10,000 and Company B has insured the property for Rs. 20,000, Company A will pay one-third of any loss and Company B will pay two-thirds.

The whereby property Insurers are liable only for such proportion of the loss that the sum insured bears to the total values at risk.