Good news: If you cancel your car insurance early, you can usually get some money back. The same goes for making changes that lower your rate, like taking a car off your policy or removing your teenager after they move out.
Jerry has helped 1,168,049 drivers get car insurance quotes in the last year, including customers who got refunds from cancelling their old policy early. Here’s a breakdown of what you can expect when it comes to car insurance refunds.
Jerry pulls up to 20 quotes from top rated carriers.
When can you get a car insurance refund?
Many people may not realize that car insurance refunds are a thing, but they’re more common than you might think. Here are a few situations where your insurance company owes you a refund.
You cancel your policy early
Paid for six months but switching after three? Your old insurer will refund the unused portion.
Common reasons people cancel include:
💰 Finding a better rate elsewhere.
🚗 No longer needing a car.
📦 Moving to a state your insurer doesn’t cover.
Most insurers refund you for the exact time left on your policy, so if you cancel halfway through, you get about half back. Some companies charge a cancellation fee, which means you might get a bit less than what you’re owed.
You make changes that lower your bill
Mid-policy changes that reduce your premium can trigger a refund*, like:
🔑 Removing a car from your policy.
👤 Dropping a driver.
📉 Lowering your coverage limits.
⭐ Qualifying for a new discount.
*In some cases, an insurer may apply a credit to your next bill instead of issuing a cash refund.
Your insurer cancels your policy
If your company drops you, they must refund your remaining balance – unless you’ve been dropped for not paying your bill. This can happen if:
📋 You’ve filed too many claims.
🚫 Your license was suspended.
⚠️ You got a DUI or another serious driving violation.
🗺️ The company no longer covers your state.
Key takeaway: You are likely owed a refund if you cancel your policy early, make changes that lower your premium or if your insurer drops you.
Getting your refund
How much you get back depends on how you paid, when you cancel and whether your insurer charges a cancellation fee. Here’s what to know before you make any moves.
💵 Paid upfront? You’ll get the unused portion back, minus any fees.
🏦 Cancellation fees vary. Some insurers charge a flat fee ($20–$50) or a percentage (5–10%), while others may charge nothing.
📅 Timing matters. Canceling when your policy is up for renewal means you should avoid any fees entirely, while canceling early means a bigger refund – but potentially also a bigger cancellation fee.
⏳ Refunds take time. Expect one to three weeks depending on payment method.
When you’re ready to cancel, call your insurer to ask how much you’ll get back, when to expect it and get confirmation in writing.
Key takeaway: Your refund depends on how you paid, when you cancel and any fees your insurer may charge. Call your insurer to cancel, get confirmation in writing and expect your money back within one to three weeks.
Jerry can help you find new coverage
Thinking about switching insurers to save money? Jerry makes it easy to compare quotes, without the hassle of calling around or filling out forms for every company.
Simply answer a few quick questions and Jerry will show you personalized quotes from over 50 insurers in minutes. If you find a policy you like, Jerry can help you switch and even cancel your old policy for you.
Situations where you won’t get a refund
Not every cancellation comes with money back. Depending on how and why your policy ends, you might not qualify for a refund at all.
Don’t expect a refund if:
🚫You got dropped for not paying. You won’t get a refund, and you’ll likely still owe money for the time you were covered before they canceled you.
🤥You committed insurance fraud. If you were dishonest on your application or filed a fake claim, the insurer can cancel you without refunding anything.
📅You cancel the day your policy ends. If you cancel at the end of your billing cycle, there’s no unused premium to refund.
⏱️Your policy already ended. You can’t get money back for coverage that’s already been used.
📝There’s a minimum amount. Some policies include a non-refundable amount that the insurer keeps no matter what, so be sure to check your policy.
💸The cancellation fee is bigger than your refund. In rare cases, canceling late in your term means the cancellation fee could eat up your entire refund, or leave you owing money.
Key takeaway: You won’t get a refund if you were dropped for nonpayment, committed fraud or your policy already ended. Non-refundable minimums and cancellation fees can also reduce,or completely wipe out, any money you’d otherwise get back.
It only takes 2 minutes to sign up at Jerry.
faq
-
💰 Can I get a refund if I cancel my car insurance?
-
⏳ How long does it take to get my refund?
-
🧾 Do I have to pay taxes on my refund?
-
📅 What if I pay monthly? Will I get anything back?
-
🚫 What if my policy got canceled because I didn’t pay?
-
✏️ Can I get money back just for changing my policy (not canceling)?
Methodology
Data included in this analysis comes from policies that Jerry has quoted within the last 6 months for drivers with a clean record and that have full coverage, unless stated otherwise. Data related to violations, accidents or credit scores pull from quote data from the last 18 months. Jerry services 48 states and offers a range of insurance companies to choose from.
Ben Moore is a writer and editor at Jerry and an auto insurance expert. He previously worked as a writer, editor and content strategist on NerdWallet’s auto insurance team for five years. His work has been published in The Associated Press, Washington Post, Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. He also served as a NerdWallet spokesperson, with appearances on local broadcast television and quotes in Martha Stewart and Real Simple magazine.
Ben has an extensive background in digital marketing, working on affiliate and programmatic advertising campaigns for brands like Cabela’s, H&R Block and Sears. He holds a bachelors degree in marketing from Olivet Nazarene University.
