In what situation might a claim be paid on a 'pro-rata' basis?

A claim might be paid on a 'pro-rata' basis when more than one insurance policy covers the same loss. In such situations, each insurer involved pays a portion of the claim proportionate to the limits and coverage provided by their respective policies. This ensures that the total amount payable does not exceed the total loss while fairly distributing the responsibility among the insurers involved.

For instance, if two insurance policies are in effect and both cover similar aspects of a loss, a pro-rata calculation would take into account the coverage limits of each policy. This approach prevents the insured from profiting from multiple payouts for the same loss and promotes fairness in how the financial responsibility is shared among the different insurers.

In contrast, situations like claims filed after the renewal date, under-reporting of loss values, or the application of a deductible do not inherently invoke a pro-rata payment structure. Each of these scenarios has its own set of rules and implications but are not relevant to the concept of pro-rata payment in the context of multiple policies covering the same loss.