Can You Get a Refund on Car Insurance? (2024)

FAQs

Can You Get a Refund on Car Insurance? ›

If I cancel my auto insurance, will I get a refund? If you paid your premium in advance and cancel your policy before the end of the term, the insurance company might refund the remaining balance. Most auto insurers will prorate your refund based on the number of days your current policy was in effect.

If you pay in monthly installments and cancel your policy at the end of the month or billing cycle, you probably won't get a refund. But if you were to cancel your policy in the middle of the month or billing cycle, then you may get a small refund since you've already paid your premium for the full month.

If you make a change that lowers your bill, your insurance company will give you the money back for the remaining time in your policy. Some insurance companies may keep the extra money and automatically apply it to your next bill. But if you'd like the cash back now, call your insurance company and request a refund.

Communicate with Your Insurer: If you need to request a refund, contact your insurance company promptly and provide all necessary documentation. Clear communication will help expedite the refund process and minimize any potential issues.

If you still want to cancel the policy, the process of policy cancelation will be initiated. Based on the tenure for which you were insured, the insurance company will deduct the premium amount and send you the refunds. An official cancellation letter/email will be sent to you by the insurer.

Car insurance cancellation fees

If you cancel at renewal: You shouldn't have to pay any fees. This is called 'lapsing' the policy. If you cancel within 14 days of starting a policy: You may have to pay an admin fee.

It depends. Some insurance companies will allow you to reinstate your policy if it gets canceled, while others will not. If your existing provider will not reinstate your auto policy, you will have to apply for coverage through another insurer or have your current insurer issue a new policy, if possible.

At the same time, you might also be subject to a cancellation fee. Many companies don't charge such penalties, but with those that do, you can expect to pay a flat fee of under $100 or around 10% to 15% of the remaining policy premium.

If you want to cancel your policy, GEICO makes it easy with no cancellation fee*.

If you want to cancel your policy after the cooling-off period you should check your insurance policy. Most insurers will give you a refund if you have not made any claims during the policy year but you will usually have to pay administration fees.

Can you cancel car insurance early? ›

Yes. While car insurance policies are usually taken out for 12 months and paid either upfront or through monthly premiums, you can cancel at any time. However, cancelling doesn't come without consequences. Cancelling before the end of your policy's term may result in paying a cancellation or administration fee.

Is there a fee for cancelling Progressive? This varies by state and when you purchased the policy. In some states, Progressive will charge a $50 cancelation fee if you cancel within your first term; meaning your policy has not yet renewed. Once the policy has renewed there will no longer be a cancellation fee.

If I cancel my auto insurance, will I get a refund? If you paid your premium in advance and cancel your policy before the end of the term, the insurance company might refund the remaining balance. Most auto insurers will prorate your refund based on the number of days your current policy was in effect.

In short – the answer is yes. You can get a refund on your insurance, but conditions do apply depending on the type of insurance you have. One of the main reasons people want a refund on their insurance is due to being sold junk insurance or dodgy unnecessary insurances.

A premium refund is a clause in some insurance policies that grants the beneficiaries a refund to the total amount of premiums paid to date. Depending on the contract and type of insurance, it will grant a refund of the premiums you paid if you die before that term runs out or if you voluntarily end your coverage.

Cancel your life insurance or funeral policy and you won't get any money back, including the premiums you paid. This is because insurance policies are risk products, not savings and investments products, and don't have a cash value.

Reasons to consider canceling your insurance policy:

You believe you're paying too much for insurance. Your business has changed, and you need different coverage. You're moving out of state, and your current insurer doesn't offer policies in your new location. You're unhappy with the service your insurer provides.

Higher rates: Car insurance companies typically charge higher premiums if you're found to have a lapse in coverage. The penalty is relatively small for a short lapse, but it grows the longer you're without insurance.

Cancellation fees: Some car insurance companies charge cancellation fees, usually $50. In other cases, they could charge you a small percentage of your final premium that you were going to pay in the future. The majority of the time, you will not have to pay a cancellation fee.

But you'll need to declare that your old policy has been cancelled to any new provider. This can make finding cover more difficult and is likely to increase your premiums. However, it's illegal to drive without insurance, so it's important to get new cover or to declare your car as SORN.

Do I need to cancel my car insurance before switching? ›

Once your new policy is in place, you will need to cancel your old one; you can't just stop paying the premiums. It's also best to get written confirmation that your policy has been canceled.

It depends how you're getting your refund. Refund checks can take 7 to 15 days to receive by mail, but you can receive them faster by opting for direct deposit or to print your check. If your insurance refund is being sent back to your card, it's usually 3 days for debit cards and 7 days for credit cards.

Cancellation Policy for Auto Insurance

If you have a GEICO auto insurance policy and decide to cancel it before the policy term ends, you may be eligible for a refund. GEICO's cancellation policy for auto insurance allows policyholders to cancel their policies at any time, regardless of the reason.

Because you'll continue to get invoiced for that premium and if not paid, it will eventually go to a collection agency. And that's NO fun. Just make a clean break of it, and save yourself a lot of trouble.

Your insurance company will pay for your damages, minus your deductible. Don't worry — if the claim is settled and it's determined you weren't at fault for the accident, you'll get your deductible back.

If you've already paid your premium for the policy period in full, State Farm will refund the unused portion. State Farm does not impose a cancellation fee or penalty for early termination. Finally, it's important to remember that you don't need to cancel your policy just because you're going through some life changes.