When Will I Get My Auto Insurance Refund?

If you've paid your auto insurance premium in advance and cancel your policy before the end of the term, you will typically get a refund for the remaining period. However, the refund amount depends on various factors, including the timing of your cancellation, the company's refund policy, and any applicable cancellation fees or penalties. It's important to review your insurance policy for details about cancellation procedures and potential penalties to ensure you receive your refund without any issues.

Cancelling your policy mid-term

You can cancel your car insurance policy at any time, but it's important to be aware of the potential consequences, such as cancellation fees and higher premiums in the future. Here are some things to keep in mind if you're considering cancelling your policy mid-term:

• Notify your insurance provider: Contact your insurance company to inform them of your intention to cancel. Some companies may require a written notice or a cancellation form, while others may accept a simple phone call. Check with your provider to understand their specific requirements.
• Understand the potential fees: Depending on the company and your location, you may be charged a cancellation fee, which is usually a flat fee or a percentage of the unused premium. This fee will be deducted from your refund.
• Refunds: If you've paid your premiums in advance, you may be eligible for a refund on the remaining balance. However, the refund amount may be affected by factors such as setup costs or short-rate cancellations.
• Avoid coverage lapse: It's crucial to avoid a lapse in coverage, as this can result in fines and higher premiums in the future. Make sure to have a new policy in place before cancelling your old one, ensuring that there is no gap in coverage.
• Follow the proper steps: Work with your insurance agent to understand the step-by-step cancellation process, including any documentation and notice periods required. Properly cancelling your policy will also help maintain a positive relationship with your insurer for any future dealings.
• Explore alternatives: Before cancelling your policy, consider alternatives such as suspending your coverage, changing your coverage, or waiting for your policy to end.

Switching insurance companies

Switching car insurance companies is relatively painless and can save you money, or help you get stronger customer service or a policy better tailored to your needs. You can switch at any time, even if you just renewed a policy with your current insurer. While most insurers don’t penalize customers for switching, some may charge you a cancellation fee.

Compare auto insurers

Get quotes from at least three insurers and compare rates, reviewing and matching policy features such as coverage types, limits, and deductibles to your current policy. Keep your declaration page handy when comparing rates. Look out for perks or freebies that could pay off later.

Research the company before you switch

While price is important, don’t overlook other factors like customer complaints and coverage options when picking your new auto insurer. Check reviews and the company's reputation for handling claims.

Contact your current auto insurer

If price is your main consideration for switching, talk to your current insurer to see if it’s willing to match your lower offer before you commit to changing. If not, find out how to cancel and request the policy end date in writing. You might need to provide a written request to end your policy. Your new company may even help you with this step by sending a cancellation letter on your behalf. Take this opportunity to find out about any cancellation fees or possible refunds from your current insurer.

Avoid a coverage gap

Make sure you have car insurance at all times to avoid higher rates. One way to do this is to set your new policy to begin the same day your old one officially ends. Many insurers offer a discount for having continuous coverage, so you may qualify for this if you time it right.

Change your ID cards

Don’t forget to swap your old car insurance ID cards with fresh ones from your new insurer. Every state except for New Mexico and Washington, D.C., allows digital proof of insurance, and some insurers allow you to download a digital ID card on your phone.

Let your leasing company or lender know about your switch

If you have a car loan or lease your vehicle, your lender may require certain levels of insurance coverage, including comprehensive and collision insurance. Ask your new insurer to send proof of insurance to the lender or leasing company as well as to you.

Moving to a new state

Step 1: Contact Your Current Insurance Provider

Get in touch with your current insurance provider as soon as possible to let them know about your move. Ask them if they offer coverage in your new state. If they do, you may be able to keep your current policy, but there might be some changes to meet the requirements of your new state. Ask your agent to guide you through these changes and any impact they may have on your premium. Remember, staying with your current provider may allow you to maintain any loyalty discounts.

Step 2: Learn About Your New State's Insurance Requirements

Each state has different insurance laws and requirements. Understanding these requirements is crucial to ensuring you have the right coverage. Some states may require additional coverages, such as:

• Underinsured/uninsured motorist coverage
• Personal injury protection
• Medical payments coverage

Step 3: Shop Around for Quotes

Now that you know the minimum insurance requirements in your new state, it's time to get quotes from different insurance companies. Compare these quotes with your current coverage to see if it's more cost-effective to switch providers or stay with your current one. Remember to consider factors such as your age, driving history, and the make and model of your vehicle, as these can influence the cost of your policy.

Step 4: Purchase Your New Auto Insurance Policy

Once you've found the insurance coverage that best suits your needs and budget, it's time to purchase your new policy. Make sure to get new proof-of-insurance cards to carry in your car and provide to your new state's DMV.

Step 5: Cancel Your Old Policy

After purchasing your new policy, contact your previous insurance company to cancel your old policy. Ensure that the end date of your old policy aligns with the start date of your new one to avoid any gaps in coverage. If you have any prepaid premiums on your old policy, your previous insurance provider will send you a refund check.

Step 6: Update Your Vehicle Registration and Driver's License

In addition to updating your insurance, you'll also need to update your vehicle registration and apply for a new driver's license in your new state. Visit your new state's DMV, either online or in person, to find out the specific requirements and fees for registration and a new license. Remember to ask about the grace period for making these changes, as failing to do so within the deadline can result in fines.

Important Considerations:

• It's essential to maintain continuous coverage during your move. Do not cancel your current policy until you have a new one in place.
• The cost of your insurance may change due to various factors, including the claims history of your new area, your annual mileage, and commuting distance.
• If you have a temporary move, such as for work or education, you may not need to change your insurance. Consult your insurance agent to understand your specific situation better.

Cancelling due to no longer owning a car

If you no longer own a car and want to cancel your auto insurance, you may be entitled to a refund. The amount of refund depends on several factors, including whether you have paid your premium in full or in monthly instalments, the timing of your cancellation, and the company's refund policy.

If you have paid your premium in full upfront and cancel your policy before the end of the term, you will typically receive a refund for the remaining period of your policy. However, if you pay monthly, you may or may not get a refund, depending on when you cancel. If you cancel in the middle of the month or billing cycle, you may get a refund for the remaining days, but if you cancel at the end of the month, you probably won't get a refund.

Some companies charge a cancellation fee, which could reduce your refund or eliminate it altogether. This fee may be a flat fee or a percentage of the unearned premium, known as a short-rate fee. It's important to review your policy's terms and conditions to understand any potential cancellation fees or penalties.

When you cancel your auto insurance, you will need to contact your insurance company and provide the necessary information, such as your policy number, name, date of birth, and effective date of cancellation. You may also need to submit a formal cancellation request and provide proof that you no longer own the car, such as a bill of sale or proof of your vehicle's plate forfeiture.

It's important to note that even a small lapse in coverage could lead to higher rates in the future or legal repercussions. Therefore, if you plan to purchase another car, it is recommended to get a new policy or a non-owner policy before cancelling your current insurance to avoid any gaps in coverage.

Making changes to your policy

Making changes to your auto insurance policy is a straightforward process. However, it's important to remember that any changes you make can affect your premium. Here are some common reasons for adjusting your policy and some things to keep in mind:

Lifestyle Changes

Life changes such as getting married or divorced, having a child, or moving to a new location can impact your insurance needs. For example, you may need to add a new driver to your policy or adjust your coverage to account for a change in your daily commute. These adjustments can result in either an increase or decrease in your premium, depending on various factors.

Changes in Vehicle

If you purchase a new vehicle, it's essential to review and adjust your insurance policy. Different vehicles have different insurance rates, and some insurance companies may offer better rates for specific car models or ages. It's also important to ensure that your new vehicle has the necessary coverage, especially if it is a luxury or electric car, as some insurers may be uncomfortable covering these models.

Changes in Insurance Needs

Over time, your insurance needs may change. For example, you may no longer require comprehensive and collision coverage if you don't have an auto loan and your vehicle is not worth much. Removing this type of coverage can lower your premium. However, it's crucial to consider the risks, as you would need to pay out of pocket if your car is damaged or stolen.

Adding or Removing Drivers

If you have a child who starts driving or if you add or remove any other drivers from your policy, it's essential to update your insurance company. Adding a new driver may increase your premium, but there may also be discounts available, such as multi-vehicle discounts. On the other hand, removing a driver could lower your rate.

Switching Insurance Providers

If you're unhappy with your current insurance provider or believe you're paying too much, you can switch to another company at any time. However, be aware that there may be a cancellation fee if you change providers in the middle of your policy term. It's usually wiser to time the switch to your policy renewal date to avoid these extra costs.

Remember, when making any changes to your auto insurance policy, it's essential to consult with your insurance agent or broker to ensure you're getting the coverage you need at the best possible rate. They can guide you through the process and help you understand how different factors will impact your premium.

Frequently asked questions