The reason for car insurance is financial protection. You pay an insurance company an agreed upon sum of money and should you have a car accident, the insurance company is supposed to cover certain expenses for you. That’s the simple way of looking at it. Of course, there are discounts, exceptions, exclusions, and special circumstances to consider, but generally this is how car insurance works.
When your rate is determined you can pay the insurance company in several different ways. You can pay monthly, which makes the payments lower but usually also involves a small service fee. You could pay your premium in full too. This can involve paying for a full year ahead of time or bi-annually. There is often a slight discount applied if you pay in full ahead of time.
In addition, there are very good reasons that a policy might be ended. This can be because you have sold the car or switched insurance companies. Or, perhaps you didn’t keep up with your payments and the insurance company had to discontinue your policy.
Can you get a refund on auto insurance? Like most things with auto insurance, it depends. Let’s take a look at when you might get a refund and when you won’t.
Can I get a Refund?
If you’ve paid your auto insurance ahead of time, such as yearly or bi-annually and your policy is cancelled or otherwise altered for certain reasons, you will likely see a refund. Some situations in which you have paid in full and may get a refund include:
- Removing a vehicle from a multi-vehicle policy
- Changing coverage for a vehicle
- Removing a high-risk driver from the policy
- Canceling the policy mid-term
These are all situations in which your premium will likely be lower and if you have paid for the year, you’ll get some money back.
What Happens if My Auto Insurance Company Cancels My Policy?
This depends on the reason for the cancellation.
There are a few reasons your insurance company might cancel your policy, including:
- Nonpayment of premium
- Policy term violations
- Multiple violations (tickets, etc.)
- Multiple car accidents
In some cases, such as nonpayment of your premiums, you probably aren’t going to see a refund. You will have to pay what you owe plus any associated fees and penalties. But if the company cancels your policy for something like unsafe driving or multiple car accidents, you may be able to recover a refund for a portion of the money you have paid.
Ready to Shop Car Insurance?
If you’re curious to see if you can save money with a new insurance company, the InsuranceWins auto insurance quote form can help. With a little information we’ll send you quotes so you can see competing rates and find the most car insurance for your money. Get started today!