No matter if the policy is new or old; if there is unused premium you should get a refund.

If you have just purchased a new insurance policy for your vehicle and then found better coverage or cheaper coverage with another company, cancelling the initial policy is going to be your first reaction. If you have paid for the insurance coverage with the first company in advance, you are owed a refund.

The refund should be for the insurance coverage that you have not used yet. As an example, say that you paid for the full 6 month policy period and you cancel after the first week of coverage. The time period after the first week through the end of the term is refundable.

The insurance company will not be covering you if you were to get into an accident for this time period so the unused premium should be refunded immediately.

However, there are companies that charge “penalty fees” for cancelling your policy early. Is this fair? No, it is not.

But, it is a way to get you to not cancel your policy. It also gets you to pay for the cost of  writing your new policy in the first place, the paperwork that was sent and also the work that has to be done to process the cancellation and any refund.

This is why it is so important to read the fine print before you buy a policy from an insurance company. If you do cancel your policy and then they claim that there is a penalty for cancelling early, check your insurance papers.

If there is nothing in your papers about this penalty, complain to a supervisor at the insurance company.  If that doesn’t resolve the issue file a complaint with your state’s Department of Insurance or Insurance Commissioner.

If you regularly drive a vehicle that you do not own it is still in your best interest to make sure there is insurance coverage in place.

Liability insurance coverage is required to drive in every state.

For example, in the state of Texas there has to be some evidence of insurance on the vehicle to avoid penalties. With their new TexasSure program it is the owner of the vehicle that is the one responsible for providing verification of insurance coverage.   

If you are driving a vehicle on a regular basis that is owned by someone else, insurance companies require that you be listed on their policy. If you are not listed and are a regular driver, they could deny coverage in the case of an accident.

If you are driving a vehicle and the owner of the vehicle does not  list you on their policy and refuses to give you any information in regard to the insurance coverage (if any) for the vehicle it would be wise to purchase a non-owner insurance policy.

A non-owner policy provides insurance coverage for you on any vehicle that you drive. You do not have to own a vehicle to be able to get this coverage and it is usually a very cheap policy.

Even if you are not the owner of the vehicle it is prudent for you to make sure that there is insurance in place. In some states both the driver of the vehicle and the owner of the vehicle will be ticketed for no insurance if there is an accident or the driver is pulled over.

To be able to drive each state requires that you carry liability insurance on your vehicle, but what if you don’t own a vehicle?

In insurance, each state has their own set of rules and regulations that insurance companies and drivers have to abide by. One rule that is the same in every state is that you have to carry at least liability insurance on your vehicle in order to be able to drive.

Not everyone that has a driver’s license owns a vehicle though and these drivers are handled differently state by state.

Specifically, in the state of Ohio you have to have insurance to drive, whether you own a vehicle or not. In addition, it is illegal to allow anyone that does not have insurance or is not listed on your insurance policy to operate your vehicle (Ohio Financial Responsibility Law).

If you are concerned about insurance coverage for a driver that does not own their own vehicle, contact a local insurance agent in your state.

Premium that you have overpaid to an insurance company is not theirs and should be returned immediately.

When you pay for your insurance, the insurance company generally makes you pay for the coverage in advance. It doesn’t matter what payment plan you are on, they want to make sure that they get their money before they provide you with insurance coverage. This is to make sure that if you have a claim and cancel your policy that you have already paid for your coverage for the day of the accident.

On the consumer side, when you cancel your insurance policy and you have paid premium for coverage that you have not used yet; you are owed a refund immediately. There is no specific timeframe that an insurance premium has to be returned, but insurance companies are expected to process refunds in a “reasonable amount of time”.

If you have not received your refund, contact the insurance company to find out why you don’t have it yet. Second, if they claim that you are not owed a refund demand (nicely) to be sent a billing breakdown showing how much your pro-rated premium was each day and how many days you paid for.

If the breakdown shows that you are owed a refund and the insurance company still won’t pay, file a complaint with your state Insurance Commissioner. In the state of Washington the Insurance Commissioner has fined insurance companies and agents for not refunding unearned insurance premiums to former customers within a reasonable amount of time.

Any damage that an insurance company pays out for you is considered a claim, but each type of claim can affect your policy differently.

Everyone that drives knows that you can lose your insurance coverage with a company if you have too many accidents or driving violations. Insurance companies are in business to turn a profit and if they are paying out one claim after another for you, they are losing money.

But what about claims that aren’t your fault, like broken windshields?

Glass claims are generally not counted by insurance companies as claims that stack up to a policy cancellation or non-renewal. But, like all things in the insurance industry it completely depends on your insurance company. Best thing to do is to contact your agent or insurance company and ask what their policy is in regards to this.

In the state of Massachusetts, an insurance company cannot cancel your policy in the middle of a term for too many claims. If they decide to not renew your policy they have to give you 45 days notice before they stop your coverage. In the case that you feel this is an unjust non-renewal, contact your own state’s Department of Insurance or Insurance Commissioner’s office.