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Pro Rata

PRO RATA

[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.

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pro rata

pro ra·ta / prō ˈrātə; ˈrätə; ˈratə/ • adj. proportional: as the dollar has fallen, costs have risen on a pro rata basis pro-rata ownership. • adv. proportionally: their fees will rise pro rata with salaries.

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"pro rata." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. 20 Jun. 2018 <http://www.encyclopedia.com>.

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"pro rata." The Oxford Pocket Dictionary of Current English. . Retrieved June 20, 2018 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/pro-rata

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