Car Insurance Refund Calculator
Estimate how much of your prepaid car insurance premium you should get back when you cancel early, with a pro-rata or short-rate cancellation.
Short answer
When you cancel early, most insurers refund the unused premium pro rata: the share of the term you didn't use. Some keep a short-rate penalty, often about 10% of the unused premium. Texas has required pro-rata refunds on personal auto policies since September 1, 2026, and Florida caps the penalty at 10% unless the insurer justifies more.
Pro-rata vs. short-rate cancellation
A pro-rata refund returns the full unused part of your premium: if you cancel a $1,200 annual policy exactly halfway through, you get $600 back. A short-rate refund keeps a penalty on top of the premium you used, often around 10% of the unused premium, so the same cancellation returns about $540.
Which one applies is set by your policy and state rules. Short-rate usually only applies when you cancel; when the insurer cancels or non-renews, the refund is normally pro-rata.
States that limit short-rate refunds
- Texas: for personal auto policies cancelled on or after September 1, 2026, the insurer must refund the full unearned premium, calculated pro rata. Short-rate penalties are not allowed, though an insurer may keep a minimum retained premium that is part of its filed rates (28 TAC § 5.7015, adopted by the Texas Department of Insurance effective September 1, 2026).
- Florida: short-rate tables that return less than 90% of the pro-rata unearned premium are prohibited unless the insurer has filed actuarial or other justification (Fla. Admin. Code R. 69O-170.010).
In other states, the cancellation clause in your policy and the insurer's filed rules decide. Ask the insurer which method it uses before you cancel.
If you pay monthly
With monthly payments you have usually prepaid only the current month, so the refund is the unused days of that month, minus any fee. Enter that month's payment as the premium and use the billing period dates instead of the full term.
Before you cancel
- Have the new policy start on the same day the old one ends. A gap in coverage can raise future rates and, in most states, driving uninsured is illegal.
- If you have a car loan or lease, the lender requires continuous coverage and may need proof of the new policy.
- Get the cancellation date and refund amount confirmed in writing; that date is what the refund is calculated from.
Already settled a claim? Share the first offer and what you finally got, anonymously, in 30 seconds. It helps us build the Lowball Index, which we publish once enough claims are in.
Worked example
You paid $1,200 for a 12-month policy that started on January 1, 2026, and you cancel on May 1, 2026.
- Days in the term: 365. Days used: 120. Days left: 245.
- Unused premium: $1,200 × 245 ÷ 365 = $805.48
- Pro-rata refund: $805.48
- Short-rate refund with a 10% penalty: $805.48 × 0.90 = $724.93
If the insurer also charges a $50 cancellation fee, subtract it from either figure.
Frequently asked questions
How long does a car insurance refund take?
Many insurers send refunds within a few weeks of cancellation, and some states set a maximum number of days. If yours is late, ask in writing for the date it was issued and the amount.
Do I get a refund if I sell my car mid-policy?
Yes, if you cancel the policy (or remove that car) you are normally owed the unused premium for it, calculated from the cancellation or removal date.
Can I get a refund after a total loss?
Often yes for the parts of coverage you no longer need once the car is gone. Ask the insurer to remove the vehicle as of the loss date and refund the unused premium; practices differ, especially for collision and comprehensive.