Auto insurance policies are straightforward: pay your bills, drive with caution, and do not get any traffic violations. That last one is difficult to do, and sometimes, events happen beyond our control.
However, there can be deadly consequences for traffic violations gone wrong. There are nearly 43,000 traffic deaths per year in the United States.
It is for that reason that you will likely request an auto insurance refund at some point in your life or that of your family members.
How do you request a refund? When will I get my auto insurance refund? Find out below.
In terms of processing time, acquiring a refund for your classic car insurance claim typically spans approximately two weeks. This duration, which encompasses roughly 10 business days, accommodates payment methods such as checks or direct deposits.
One of the biggest factors as to how much you will receive in a refund is if you paid monthly or if you paid your full premium all at once. Premiums are usually paid once or twice per year. This depends if you have a six-month policy or a twelve-month policy.
Let's say that you decided to pay in advance and cover yourself for an entire year. However, a situation arose where you had to move abroad and you would not need a car for the rest of the year. But the bad news for you is that you were only four months into a car insurance policy that you already paid a year for.
No worries, it is possible for you to receive a refund for the unused months in this situation. You would have to simply let the car insurance company know that you no longer need their policy.
Then, they would give you a refund for the remaining eight months that you left unused on your policy as long as you cancel it before the next month was activated.
Let's say that you paid $1,200 for the entire year. Here, that would mean that you are paying $100 per month for your car insurance. In that situation, the car insurance company would take the eight months of unused policy out of your total bill to them.
With quick math, you can determine that you would be due an $800 refund for this policy.
The other payment option that some people choose to go with is to pay monthly. This can give you a little more freedom because then you are not relying on the insurance company to do the right thing if you wish to cancel in the middle of your policy.
Here, you would not be entitled to nearly as big of a refund because it does not cover nearly as much time. However, it may be possible to receive a small refund in this situation if you cancel your policy early enough in the month.
For example, you already paid for next month's coverage but end up having to cancel it 15 days into the month. There is a chance that if you cancel it on the 15th day of that cycle you could get half of your payment for that month back in the form of a refund.
In that situation, the timing of the refund to get back to you would be the same as above.
Another situation where you could be entitled to a refund is if you make a change in the middle of a policy. This change would result in a lower rate for you and thus, the insurance company would have to provide a refund for anything unused by you.
One of the biggest examples of this is if you take your teenage driver off of your car insurance policy. Teenagers tend to be the most expensive drivers to cover. So, if you plan on getting them off of your policy, you are likely to save a decent amount of money and get a refund for the time unused on your premium by the teenager.
Something that you need to watch out for if you decide to cancel your insurance policy is the insurance company charging a cancellation fee to do so. This can be as little as $20 in some states but nevertheless, do not expect it in your refund.
Make sure you know in advance if the company has a cancellation fee.
Another thing that a car insurance company may do is charge you short rates during your first month. This can be anything from doing the paperwork to retrieving your driving record to determining your premium rates.
Because of this, they may justify an extra cost for your first month, thus returning less money to you.
In the example above, they may charge you $150 for your first month instead of $100. That would mean that your other months would be $95.45 each. You would receive $763.60 in a refund instead of $800.
Finally, it is possible that the insurance company may decide to cancel your policy in the middle of it if your risk level suddenly changes. An example of this is if you get a DUI while you are on their premium.
The insurance company may decide that your risk level is too high to keep under their policy and drop you as a client. In that situation, they would have to refund you for any unused time on your premium or payments.
These are some of the biggest things that you should know about auto insurance refunds. It should give you an idea of scenarios that you are entitled to a refund and how long it will take you to get it.
This way, you will never need to ask yourself, "When will I get my auto insurance refund?".