Mid-Term Rating

Overview

When you add or remove coverage mid-term, LAMS recalculates the premium on a pro-rata basis — meaning you pay (or receive credit) only for the remaining days in the policy period. This page explains when re-rating occurs and how to process the resulting payment or credit.

What Triggers Re-Rating

A mid-term re-rating occurs when you:

• Add an endorsement that increases coverage (e.g., cyber, EPLI, higher limits)
• Remove an endorsement that reduces coverage
• Change the limit of liability or deductible
• Add an additional insured (for premium-bearing additional insured forms)
• Make any other change to the policy that affects premium

How the Adjustment Is Calculated

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Mid-term rating summary screen showing original premium, endorsement premium, days remaining, pro-rata factor, and additional premium due

Mid-term rating summary screen showing original premium, endorsement premium, days remaining, pro-rata factor, and additional premium due

The system calculates:

1. The premium impact of the change (add or remove).
2. The number of days remaining in the policy period.
3. The pro-rata factor = days remaining ÷ 365.
4. The adjustment premium = endorsement premium × pro-rata factor.

If additional premium is due, the policy moves to Mid-Term Payment Pending status. If a credit is due, the credit is applied to the account or refunded.

Processing an Additional Premium Payment

1. When an endorsement adds premium, LAMS prompts you to process payment.
2. The Payment Stepper opens automatically.
3. Select the payment method and enter the payment details.
4. Submit the payment.
5. The endorsement is confirmed and documents are generated.

Note

For Cyber endorsements added within the first 90 days of the policy term, a non-pro-rata calculation applies. After 90 days, the standard pro-rata method is used.

Processing a Premium Credit

If removing coverage results in a premium credit:

1. The credit amount is shown in the endorsement summary screen.
2. Confirm the credit.
3. The credit is applied to the account balance or, if a refund is needed, follow the Refunds process.

Disabling Re-Rating

In rare cases, re-rating can be turned off for a specific policy — for example, if the policy has a locked flat premium. Contact your administrator to disable re-rating for a specific policy. Once disabled, no premium adjustments will be calculated for mid-term changes.