Auto Insurance Refunds: How Much Money Are We Getting Back?

Auto insurance companies are refunding customers for a variety of reasons. Customers may be eligible for a refund if they cancel their policy mid-term, having paid their premium in advance. This could be because they found a better rate elsewhere, sold their car, or moved to another state. Customers may also be refunded if they make changes to their policy, such as lowering their coverage limits or removing a teenage driver. In some cases, insurance companies may cancel a customer's policy midway through the term and issue a partial refund, often due to non-payment or increased risk.

Cancelling your policy

Cancelling your auto insurance policy is a simple process, but there are a few things to keep in mind. Firstly, you should only cancel your policy if you are replacing it with a new one or getting rid of your car. If you are keeping your car, make sure to arrange for other insurance first to avoid a lapse in coverage, as driving without insurance is illegal in many states and can result in fines.

Secondly, you should inform your insurer as soon as possible. Contact your insurance company or agent, either by phone or by visiting their office if they have a physical location. Some companies may also allow you to mail or fax a signed cancellation request. Be sure to check with your insurer to see if they require any fees, a cancellation letter, or a notice period before they will process the cancellation.

If you are switching insurance providers, you can ask your new insurer to initiate the cancellation process and guide you through it. You will need to provide them with your signature, prior policy number, and date of cancellation. It is important to ensure that there is no gap between policies, as this can result in higher rates in the future and leave you liable for any repairs or medical bills if your car is stolen, damaged, or involved in an accident while uninsured.

When you cancel your policy, your insurer will likely issue a prorated refund for any prepaid premiums, minus any cancellation fees or outstanding payments. The refund will typically be issued through the same payment method you used to pay for your insurance, such as a check or credit card refund.

Moving out of state

Moving to a new state can be an exciting but stressful time. There are a lot of things to think about, and one of them is your car insurance. Here are some things to keep in mind when it comes to auto insurance and moving out of state:

Check with Your Current Insurance Provider

Firstly, you need to find out if your current insurance company operates in your new state. Contact your insurance agent to ask about coverage options in your new home state. They will be able to tell you if your current provider can cover you and what changes you may need to make to your policy to meet the new state's requirements. Car insurance requirements vary by state, so you may need to update your policy. These changes might cause your premium to change.

Shop Around for Quotes

It's a good idea to shop around and get quotes from multiple insurance companies to ensure you're getting the best deal. You can get recommendations from friends and family who live in your new state or check with small, independent insurance companies that operate locally.

Timeline for Switching Insurance

Typically, you will have 30 to 90 days to switch your car insurance after moving to a new state, but it's important to verify the exact timeline with your current provider. Don't cancel your current policy until your move is complete and you have a new policy in place. Make sure you have all your important documents readily available during the move so you can easily access them when needed.

Update Your Car Registration and Driver's License

Once you've settled into your new home and have a new insurance policy in place, you'll need to update your car registration and apply for a new driver's license. Your car registration must match the location of your home, so you'll need to fill out the necessary paperwork and pay the fees at the DMV in your new state. As for your driver's license, you may be able to obtain it at the same time as your new vehicle registration, or you may need to go to a different location to be photographed.

Cancel Your Old Policy

After you have a new policy set up, don't forget to cancel your old insurance policy. Make sure the end date of your old policy aligns with the effective date of your new policy to avoid any gaps in coverage. Gaps in coverage can result in costly fines if you're caught driving without insurance, and you'll be responsible for all expenses if you get into an accident.

Selling your car

If you're selling your car, there are a few steps you should follow to ensure the process goes smoothly. Here's a guide on what to do:

Get Your Paperwork in Order

Make sure you have all the necessary documents, such as the vehicle title, service records, and the original sales paperwork. You'll also need to know the year, make, model, current mileage, trim level, and any additional features of your car. If you're in California, you'll need the California Certificate of Title, which proves the car belongs to you and will need to be transferred to the buyer. You may also need to fill out certain forms, such as the Application for Duplicate or Transfer of Title (REG 227) if you don't have your title, and the Vehicle/Vessel Transfer and Reassignment (REG 262) form, which you can obtain from the DMV.

Get a Valid Smog Certification

In most cases, you'll need a valid smog certification to sell your car. This is especially true in California, where you'll need to go to a STAR station to get the certification. The certification is valid for 90 days, so make sure it aligns with your planned sale date. However, if you have an electric vehicle or a car that is less than eight years old or older than 1975, you may be exempt from this requirement.

Get a Vehicle Inspection

Potential buyers will likely want to get a vehicle inspection to ensure everything is in good condition. Even if the buyer doesn't request one, it's a good idea to get a CarFax report to show your vehicle's history, including any accidents or major issues.

Set a Price Range

Check sites like Kelley Blue Book to see what your car is worth and set a minimum and maximum price to give yourself room to negotiate.

Post Your Car Listing

Clean your vehicle, take clear photos, and post your listing on sites like Craigslist, OfferUp, Facebook Marketplace, or AutoTrader.

Pay Any Fees Related to the Sale

Be prepared to pay any fees associated with selling your car, such as use tax and transfer fees. These fees vary by location, so check with your local DMV for specific requirements.

Finalize the Paperwork with the Buyer

When you have a buyer, collect payment and fill out the necessary paperwork, including the Vehicle/Vessel Transfer and Reassignment form (REG 262) with the buyer. If there is a lien on the car, make sure you have the release form ready and remove the license plates. Both you and the buyer will need to report the transfer of ownership to the DMV.

Submit the Paperwork to the DMV

Submit the transfer documents to the DMV, including the Notice of Transfer and Release of Liability, which can be done online or by mail. Provide the seller's full name and address, the VIN number, and license plate numbers. Both you and the buyer will need to submit documents and pay any required fees to finalize the sale.

Making changes to your policy

You can change your car insurance policy at any time, but it's important to be aware of any related fees and have a new policy in place before cancelling your old one. Most companies make it easy to update or cancel your policy, but the process depends on the exact changes you want to make and your insurer's specific process.

To change an existing policy, such as adjusting coverage limits or adding another driver, call your insurer's customer service number or speak with your local agent. Minor adjustments, like adding or removing vehicles or drivers, can often be made directly through your insurer's website or mobile app. Policy changes usually take effect immediately, but you may be required to pay for any increase in your premium upfront.

If you no longer need certain types of coverage, such as comprehensive and collision coverage, you can remove them from your policy. Typically, higher insurance coverage limits result in higher premiums, so reducing your coverage may result in a refund. Similarly, removing a vehicle from your policy will usually decrease your rates and could result in a refund.

Before making any changes to your policy, be sure to check your insurer's rules regarding cancellations and any potential cancellation fees. Some insurers may charge a cancellation fee that could offset the amount of your refund.

When changing your policy, it's crucial to ensure there are no gaps in your coverage. Even a small gap could create problems if your car is stolen, damaged, or involved in an accident while uninsured. Any gaps in coverage could also raise your insurance rates.

Your insurance company cancels your policy

If your insurance company cancels your policy, you may be able to get a refund, depending on why the policy was cancelled and how much of the premium you paid in advance. If you paid your full premium upfront, you will typically get a refund when you cancel your policy. If you pay your premium monthly, you may or may not get a refund, depending on when you cancel.

There are several reasons why an insurance company might cancel or not renew your policy. These include:

• Non-payment of policy or too many missed payments
• A criminal record, false declarations, or "moral hazard"
• Change in situation (also known as a material change in risk)
• Home in disrepair or requiring maintenance or renovation

If you receive a cancellation notice, you should deal with it immediately. If you think the insurer has misinformation or the reason is a late payment, ask if you can resolve the issue before cancellation. If you think the cancellation is unfair or unlawful, and you can’t resolve it with the insurance company, you can contact your state department of insurance.

Frequently asked questions