[Insurance Documents and Processes]Stuart sells his vehicle and cancels his auto policy.

Apro rata cancellationoccurs when an insurer cancels a policy or when the insured cancelswithout penalty, and the insurer refunds thefullunexpired portion of the premium. The refund is calculated strictly based on time remaining in the policy period. No service charges, cancellation penalties, or retained percentages apply.

This is different fromshort rate cancellation, where a penalty is applied when the insured cancels voluntarily.

“Total rate,” “fully fixed,” and “non-adjusted rate” are not recognized forms of cancellation methods.

Thus, refunding the entire unused premium confirms the cancellation ispro rata.