My Auto Insurance Claim Was Denied, But When Can I Expect a Refund?

No matter why you’ve made the decision to stop driving, whether it’s to reduce your carbon footprint by taking public transportation or because you’ll be moving to a country or state where car insurance isn’t required, you’ll probably want to cancel your auto insurance policy as well. It’s also possible that you’re looking to switch insurance providers because you’ve found a more affordable or comprehensive plan that you want to cancel. You may be eligible for a refund if you cancel your policy before it expires.

How do car insurance refunds actually work? Finding out how your car insurance billing system works and any early policy termination fees apply can help you make decisions such as when to switch your car insurance or when to drop coverage on a vehicle..

Insurance Refund if You Paid in Full

Billing would be easier to understand if everyone paid in full for their car insurance policy. It is possible for refunds to occur for a variety of reasons. You are more likely to get a refund on your insurance premium if you pay your premium in full in advance. The following are common ways to be eligible for a full refund of your insurance premium:

  • Mid-term cancellation of a car insurance policy is illegal.
  • Getting rid of insurance on a vehicle
  • Changing insurance policies or removing a car from coverage
  • Relocating to a less dangerous area
  • Doing away with an inexperienced or reckless driver from your team
  • Example: A full six months’ worth of car insurance for three different vehicles was covered by Jack. He sold one of the vehicles three months later. To make up for the insurance he didn’t use on the sold vehicle, he’ll get three months back.

Reimbursement for Monthly Car Insurance Payments
Paying your insurance premiums monthly means that less money is being invested in the long term. If you make any modifications to your vehicle, you’ll likely receive a credit on your next bill. Refunds are less likely and credits are likely to reduce future payments rather than generate refunds. Canceling mid-billing cycle is your best bet if you pay your auto insurance premiums on a monthly basis for a refund.

An example of this is John’s car insurance, which he pays for month-to-month. On the first of the month, he makes a payment, and on the 10th of the month, he decides to cancel his insurance. Due to the fact that John paid for an entire month’s worth of coverage and only needed 10 days, he is entitled to a small refund (one-third the length of an average month).
Tips for Avoiding Problems with Car Insurance Refunds
Cancel your auto insurance policy on the date of renewal.
If you’re paying on a monthly basis, you can cancel at any time.
Your insurance renewal date can be changed.
If you wait until the day of your renewal or payment to make changes, neither you nor they will owe any money. Depending on your insurance history, this statement may not be accurate, but for the most part, sticking to your renewal date will take care of any issues.

Inquiries that have been asked frequently (FAQs)
In order to cancel my car insurance, do I have to pay a cancellation fee?
If you decide to cancel your car insurance, the insurer may charge you a cancellation fee. It is less likely that a long-standing customer will be penalized than someone who just recently signed up for the policy. Your refund will be reduced by the amount of any fees charged. 1 Find out about cancellation fees from your insurance company.

Exactly how long will it take for my insurance company to reimburse me?
Sending a check in the mail is the most common method of refund. It will take about two weeks for it to arrive. If you have EFT payments set up for your car insurance, some insurance companies will return the money to your bank account. You can expect to receive your refund within 10 business days if you are paid via direct deposit. Please inquire about your refund delivery method with your insurance agent or rep.

My refund check was never delivered to me. What’s next?
Call your insurance company if you haven’t received a refund check or direct deposit after two weeks. Insurance companies will be able to hold the issued check and send you a new one, assuming it was not fraudulently cashed.