You can get a refund when you cancel an auto policy mid-term if you paid in full, but car insurance companies will often retain administrative fees when you

cancel your existing policy

How refunds for car insurance work

Most

auto insurance companies

refund unused premiums for policyholders who cancel mid-term. That is, if you pay for your auto insurance policy by the year and cancel after a few months, you’ll usually be refunded for the month you didn’t use.

You can typically get an auto insurance refund if you…

Canceled your current insurance policy: If you moved to a new state,

found a better rate

with another insurer, or sold your car and no longer need coverage, you’re usually entitled to a refund for unused premiums when you cancel your car insurance policy.

Made changes to your policy: Removing a driver, vehicle, or coverage options can all reduce your insurance rates. If you paid in advance for rates based on those factors, you can typically get a refund credited to your account against your next bill.

Had your policy canceled by the insurer: Insurance companies sometimes choose to cancel a policy due to changed risk factors, such as a new violation or at-fault accident. If you’ve paid in advance for the coverage, you should be able to get a refund.

You’re likely NOT eligible for a refund if…

You canceled your policy close to the renewal date

Your insurer canceled your policy due to non-payment

Monthly payments make refunds harder

If you pay for your auto insurance by the month and cancel near the beginning of your billing cycle, you can likely get a refund for the weeks you didn’t use your insurance coverage. But if you cancel closer to the end of the month (i.e., your renewal date), you might not get a refund.

Keep in mind: Some car insurance companies charge cancellation fees when you terminate a policy. Call your insurance agent to see if you’ll be subject to fees when you cancel.

Learn more:

How to get monthly car insurance with a low upfront payment

How to get a refund when you cancel car insurance

Don’t cancel without a new policy lined up. It’s important to set up new insurance before you cancel your old policy. Jerry is a convenient tool that can help you cancel your old policy and offer same-day coverage.

3 steps to get a car insurance refunded

Step 1: Contact your old insurer

You can typically find the customer service or claims department’s contact info on your policy documents, on their website, or by calling the customer service number provided on your insurance card.

Step 2: Request a refund

Explain your situation and the reason for wanting a refund. The agent will be able to confirm the refund amount.

Step 3: Wait for the refund to come in

If your insurance provider approves a refund, you’ll typically receive it in the same way you made your initial payment. A refund typically takes anywhere from a few days to a few weeks to be posted to your account.

The exception: If you’re getting a refund due to changes to your current insurance rather than policy cancellation, you’ll usually receive the refund in the form of a credit against your next premium payment. If you’d prefer to receive a direct deposit or a refund check, you’ll need to contact your insurer.

How to get a refund on gap insurance

You should cancel your

gap insurance

if:

If you've sold your vehicle

When your car loan balance is lower than your car's actual cash value

If you no longer find gap insurance necessary

When switching to a new gap insurance provider

How to

cancel gap insurance

Review your policy for cancellation restrictions and refund deadlines

Get new gap insurance quotes if required by your lender

Prepare necessary paperwork: original gap insurance documents, new policy details, and your loan/lease agreement

Contact the dealership to request a cancellation

If you paid in full, seek a refund for unused coverage, or enjoy reduced monthly payments if it's included in your car payment

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Do any states offer car insurance refunds in 2023?

Early on in the coronavirus pandemic, some states, such as

Michigan

, offered refunds to policyholders because so few people were driving. These refunds were rewarded automatically to eligible customers but the window for receiving a

COVID-related refund

has passed.

If you want to stay on top of

rates that keep climbing

, a simple way to do that is by comparing quotes from different providers.

Learn more:

New car insurance grace periods, explained

FAQs

Do I get car insurance money back?

Whether or not you can get a refund from your car insurance depends on the circumstances and your policy terms, such as policy cancellation, overpayment, or policy adjustments. To find out if you're eligible for a refund, contact your insurance company or review the terms of your policy.

What happens if I cancel my car insurance?

If you decide to cancel your car insurance and you've paid your car insurance premium in advance for the entire policy term, you may be eligible for a refund of the unused portion of your premium. In other cases, some insurance companies may charge you a cancellation fee when you cancel your policy before it expires.

Who pays for the car insurance refund?

The responsibility for paying a car insurance refund typically falls on the insurance company. When you qualify for a refund, the insurance company must process the refund and issue the payment to you.

Am I eligible for a car insurance refund in Michigan?

In 2022, Michiganders who had a vehicle insured in the state of Michigan as of 11:59 pm on October 31, 2021, were eligible for a $400 refund per eligible car or motorcycle through the

Michigan Catastrophic Claims Association (MCCA)

Do I qualify for a car insurance refund in Connecticut?

Car insurance refund eligibility in Connecticut, as in most states, typically depends on specific circumstances and the terms and conditions of your insurance policy. To determine your specific eligibility for a car insurance refund in Connecticut, you should contact your insurance provider directly.

What’s the difference between prorated refunds and short-rate cancellation fees?

Most major insurers don’t charge cancellation fees—but some companies “short-rate” policies, meaning that they charge more for the early months of a policy than for later months. This has the same effect as a cancellation fee, and your state’s laws will determine whether or not your insurer can do it.

The ideal car insurance refund is a prorated refund—that is, a refund that pays back unused insurance premiums based only on time.