Other Free Encyclopedias » Law Library - American Law and Legal Information » Free Legal Encyclopedia: Prerogative orders to Prohibition

Pro Rata

policy insurance creditors according

[Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share.

In a BANKRUPTCY case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. If the debtor has any remaining funds, the money is divided proportionately among the creditors, according to the amount of the individual debts.

A pro rata clause in an automobile insurance policy provides that when an insured person has other insurance policies covering the same type of risk, the company issuing the policy with the pro rata clause will be liable only for a proportion of the loss represented by the ratio between its policy limit and the total limits of all the available insurance.

Pro Se [next] [back] Pro Hac Vice

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or

Vote down Vote up

almost 7 years ago

don't understand the concept. if you cloud add some example with the text then it would be fine enough for better understanding