Insurance CancellationCalculator

Understanding insurance cancellation fees in Canada

When you cancel an auto or home insurance policy before its renewal date, you usually won't get back every unused dollar of premium. Most Canadian insurers refund early cancellations using a short rate calculation rather than a straight day-by-day (pro rata) split — and that difference can quietly cost you a few percent of your annual premium.

Short rate vs pro rata

A pro rata refund returns the premium for the days you didn't use: cancel halfway through a $1,200 policy and you'd get roughly $600 back. A short rate refund keeps a little extra on top of the days used — the insurer's way of recovering the fixed cost of writing and then cancelling a policy. On the standard industry short rate table the gap is about 6 to 8 points of your annual premium early in the term, and insurers with their own schedules retain up to about 13 points more than pro rata at day 30; either way it shrinks as you approach renewal. Our short rate calculator and pro rata calculator let you compare the two side by side, and the short rate vs pro rata guide explains the mechanics in detail.

When you'll be charged — and when you won't

The short rate penalty applies to most voluntary mid-term cancellations: switching insurers, no longer needing coverage, or finding a better rate. Some cancellations are refunded pro rata with no penalty: which reasons qualify is set by each insurer's rules, and common examples are the insurer cancelling the policy or the sale or total loss of the insured vehicle. Ask whether your reason qualifies before you confirm the cancellation.

Every insurer is a little different

Although many companies share the same standard industry short rate table, several use their own schedules. At day 90 the standard table retains 31% of the annual premium, while Intact retains 34% and TD and Desjardins retain 36%. Economical (Definity) does not use a day table at all: it charges the pro rata earned premium plus a flat 7%, 4%, or 2% depending on the day of cancellation. Our full comparison table shows every insurer's rates side by side, and each company guide breaks down the table, cancellation phone number, and refund timeline.

Tools to help you decide

Beyond the calculators, you can generate a ready-to-send cancellation letter and estimate the true cost of monthly payments versus paying annually. Everything is free, requires no registration, and runs on official rate tables — but every figure is an estimate, so confirm the exact amount with your insurer before you cancel.