Enter months without a leading zero.
Pro rata has no penalty and is simply calculated by dividing the number of days the policy was in effect by the number of days in the policy period.
Short rate adds a penalty to the earned factor. The penalty goes down the longer the policy stays in effect. There is no easy way for you to calculate the short rate earned factor other than to use the online wheel calculator or the traditional manual wheel to look up the factors.
Short rate 90% pro rata is an alternative calculation that also includes a penalty. It is calculated at 90% of the pro rata unearned factor.
Which of the two short rate methods caries the highest penalty will vary based on how long the policy has been in effect. If a policy is canceled early in the policy period (14 or less days of an annual policy) then short rate (90% of pro rata) will have the highest penalty. The reason for this is with the 90% pro rata method 10.2% of the policy premium is earned on the first day (annual policy). With the short rate method only 5% is earned the first day of the policy period.
Unearned factor is calculated as (1.000-earned factor). In other words the earned factor plus the unearned factor will always total to 1.
Earned premium is calculated by multiplying the Premium by the earned factor.
Return premium or unearned premium is calculated by multiplying the Premium by the unearned factor.
While the online wheel calculator always assumes an annual policy you may change the expiration date to a date of your choice, as long as it is later then the effective date. Please note that the short rata calculation is only available for policies that have a 6 month, 12 month or 36 months term. The reason for this is that the traditional vintage wheels were only available for these three policy periods. We are unaware of other policy terms that use the traditional short rate factor. Short rata (90% of pro rate) and pro rate are available for any policy dates you enter.