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If you’re thinking about canceling your insurance policy, you may be wondering if you can get a car insurance refund. While some providers may offer partial reimbursements, many also charge a cancellation fee. Failing to maintain continuous car insurance can result in state fines and increased monthly premiums. In some cases, it’s a better idea to maintain insurance coverage than to cancel your policy briefly.

This article will help you decide if you should cancel and how to get a car insurance refund if you do. Our researchers have reviewed the best car insurance companies and carefully studied the practices of many top providers. If you’re thinking of switching providers, be sure to compare quotes from several competitors. You can start by entering your zip code below or calling (844) 246-8209 to get free car insurance quotes.

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Can I Get A Car Insurance Refund?

Some providers will offer a car insurance refund if you cancel your policy. Your refund amount is likely to be prorated and will depend on when you cancel your policy. Many auto insurers charge a cancellation fee, so be sure to review your insurance contract for specific details.

Refund policies vary from provider to provider and from state to state. While many providers may not charge a direct cancellation fee, canceling your policy can still hurt you financially. For example, your insurer may change the way your rate is calculated if you cancel early (from a monthly rate to a more expensive daily rate). This is called a short rate cancellation and typically applies if you cancel your car insurance policy early in the contract term.

Should I Cancel My Car Insurance?

Typically, the best reasons to cancel your car insurance policy are if you switch providers or no longer own a car. In most other cases, canceling your policy can cost you big down the road. Here are a few reasons you may cancel your car insurance:

  • You move to another state. If you move to a different state, there is a good chance you’ll be able to maintain a policy with your current insurer. However, some insurers are only available in certain states. If you move to a state where your current car insurance provider does not operate, you should cancel your old policy once you’ve secured new coverage.
  • You no longer have a car. If you do not have a car, there is no reason to maintain an insurance policy.
  • Your car is not being used. If you have a car that is not being driven, you may not need an insurance policy, and it could be a good idea to cancel.
  • If your vehicle is registered with the state, you may be required to maintain a car insurance policy, even if nobody drives the car. Make sure you cancel your registration and garage your vehicle in a closed garage before canceling your insurance policy. If you only plan to go without driving for a short period of time (less than three months), it is likely better to continue coverage than to cancel and start a new policy. Coverage gaps can result in higher premiums when you decide to reinsure.
  • You switch providers. Switching providers can be a good reason to cancel your existing policy. Be sure that you set up your new coverage before canceling your current coverage, as some states will penalize you for any gap in coverage.
  • You travel abroad. If you plan to travel abroad for an extended period of time, you will need to house your car in a closed garage if you want to cancel your auto insurance policy. Be aware you may come back to higher car insurance premiums if you do this. One option is to declare your vehicle as planned non-operational (PNO). If you discuss this with your insurer, you may be able to maintain coverage at a highly reduced rate while you are out of the country.

Always keep in mind that your coverage history will factor into future car insurance costs. A lapse in coverage may cause future auto insurance rates to increase. In general, it is better to not renew your auto insurance policy than it is to cancel early for a small car insurance refund. Be sure to determine how much canceling early might cost you down the line and consider waiting to cancel your policy until the end of your current contract. In most cases, this will be six or twelve months.

How To Cancel Your Car Insurance Policy

If you choose to cancel your car insurance policy, the first step is to call your insurance agent. Your agent will guide you through the rest of the process. Before canceling your insurance, however, be sure to carefully read and understand the cancellation policy as described in your insurance contract.

In many cases, you will receive a car insurance refund if you cancel your policy early, though this is not guaranteed. Specifics can vary greatly between states and providers, so the best way to understand what will happen is to review it with your insurance agent or a customer service representative.

Some insurers may allow you to cancel policies online, but we highly recommend that you speak with an agent or company representative before canceling any insurance policy. Be sure you understand the consequences thoroughly beforehand.

Our Recommendations For Car Insurance

If you’re looking for a car insurance refund because your premium is too high, you might want to switch providers. If this is the case, consider two of our top-rated insurers: USAA and Geico. Both companies offer low car insurance rates to drivers in every state.

You can read our suggestions for how to get cheap car insurance, or start comparing quotes from the industry’s best providers by entering your zip code into the tool below or calling (844) 246-8209.

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USAA: Best For Military

USAA scored very highly in our USAA auto insurance review. In fact, it is the only provider that we’ve given a 4.8-star rating. USAA offers some of the lowest premiums in the country, in part because of its wide range of discount opportunities, such as:

  • Military installation discount
  • Annual mileage discount
  • Defensive driving discount
  • Good student discount
  • Family discount

Just about the only downside to USAA is that it is only available to military members and those who have a parent or spouse with a USAA membership.

Geico: Best Overall

Geico is also one of our highest-rated providers and offers low rates for most drivers. Unlike USAA, Geico insurance policies are available to everyone. Potential ways to save money on Geico policies include:

  • Good student discount
  • Good driver discount
  • Safety device discount
  • Multiple vehicle discount
  • Federal employee discount

Customers report that the Geico claims process is quick and easy. The company received an A+ rating from the Better Business Bureau and has an A++ financial strength rating from AM Best. Read our full Geico auto insurance review for more information.

If you’re not sure which provider would be best for you, compare Geico and USAA directly in our Geico vs. USAA review.


In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
  • Availability: We consider availability by state as well as exclusions for specific groups of drivers.
  • Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
  • Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
  • Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
  • Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.