Is Car Insurance Refundable?

There are many reasons why you would cancel your policy mid-term.  The reasons range from your desire to reduce your carbon footprint and commute on public transportation, moving to a different country or state that doesn’t require car insurance ​or trading in your vehicle for a motorcycle or RV. Naturally, you would want some money back. Find out if car insurance is refundable. Also, get online car insurance quotes free, before considering cancelling your coverage.

The short answer is “yes!”. If you cancel your policy before it expires, you are often entitled to a refund. But there are some things to know, in order to understand how much money you will get back and if there are any associated fees.

If you paid your policy in full, it is relatively easy to ask for refunds. The further in advance you have paid, the more likely you are to get a refund if you cancel your car insurance policy. Common reasons to ask for a refund if you paid in full include:

  • Canceling your car insurance policy mid-term, due to a variety of reasons.
  • Removing coverage from a vehicle. Again, there are many reasons to do so.
  • Changing coverage or removing a vehicle. For example, when dropping full coverage on older vehicles.
  • Moving to a lower-risk area. This happens when you move to a rural area, where accidents are less often
  • Removing a high-risk driver from your plan (for example, removing your teen driver from your policy).

Of course, if you pay monthly, you will have less money refunded.

It is possible for a fee to be charged if you cancel your car insurance. Typically, a fee only applies if you cancel your car insurance within the first two weeks of purchasing the policy. But if you kept the policy active for a long time, the fee will not apply.

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