Driving on a regular basis is considered a high endeavor. You have to navigate unique road conditions and adapt to the behavior of other drivers. Auto insurance provides a safety net by covering you in emergencies. Finding the right car insurance policy can be difficult because there are multiple variables an insurance company looks at to help finalize your auto insurance rate. Perhaps you are unsatisfied with your current rate and would like to switch carriers. If you have already paid your premiums ahead of time, you may be curious about a potential refund in the event that you switch carriers.
In most cases, you should receive a refund from your insurance company if you’ve paid your premiums in advance. Your insurer may investigate why you are canceling your policy before issuing your refund. If you pay your premiums on a monthly basis, you may not receive a refund if you cancel your policy early.
If you are moving to another state, you will have to cancel your current auto insurance policy and find another one. You may end up paying lower rates on your new policy depending on where you are moving to. Since you’re moving, your current insurer may issue a car insurance refund. Selling your car may also help you qualify for a refund. Since you no longer need coverage, your insurer may refund your premiums minus a potential cancellation fee. You may also qualify for a refund if you are switching insurance companies.
There are a few other situations where you may qualify for a refund, but there’s also a chance that your insurer issues a credit instead. If you opt to remove some coverage from your auto insurance policy, your rates will decline. If you opt to lower your policy limits, your insurer may issue a refund. If you opt to remove a vehicle from your auto insurance policy, you’ll likely receive a refund. It’s recommended that you talk to your insurance agent before making any decisions.
If your insurer sends you a refund, you will likely receive it through your regular payment method. If you have the funds deducted from your account every month, then your refund will be deposited into your account in the same manner.
If you decide to cancel your auto insurance policy, you won’t receive a refund unless you pay all of your premiums ahead of time. If you cancel your insurance policy in the middle of your billing cycle, you may receive a small refund because you have already paid your premium for the month. You’ll likely be required to pay a cancellation fee regardless of when you choose to cancel your policy.
If your insurer cancels your policy, you will still receive a car insurance refund unless your policy is canceled because you were not paying your premiums. If your policy was canceled for non-payment, you are responsible for covering the balance of the unpaid premiums. In addition to failing to pay your premiums, your insurer may cancel your policy for receiving too many tickets or getting convicted of a major driving violation such as a DUI.
If you plan to continue driving on a regular basis, it’s recommended that you avoid canceling your current policy until you can secure a new one. Once you have an established date for your new policy, you can ask your current insurer to cancel the policy on the day that your new policy starts. It’s recommended that you avoid gaps in coverage where you’re driving without insurance. Gaps in coverage may result in you paying higher premiums. You’ll also be on the hook financially if something happens to your vehicle while there is a gap in coverage.
In most cases, you should receive a car insurance refund from your insurer without any complications. If you have any questions, contact the team here at CF&P Insurance Brokers, and we will assist you.