Ontario Auto Insurance Cancellation Fee Calculator
Estimate your possible short-rate cancellation cost before switching auto insurance mid-term. This tool uses a broker-style short-rate calculation so you can compare the cancellation cost against the savings from a better quote.
This calculator is an estimate only. Your actual cancellation amount could be slightly more or less depending on the short-rate table, minimum premium, fees, and rules used by your insurer.
Estimate Your Auto Insurance Cancellation Cost
Enter your current annual premium, policy dates, and optionally how much you have paid so far. The calculator estimates the premium the insurer may retain, the short-rate charge, and whether switching mid-term may still make financial sense.
Estimated days the policy was active.
This is the main retained premium estimate.
Estimated extra charge above the earned premium.
Only calculated if premium paid to date is entered.
Your estimated cancellation calculation
Do not rely on “about one month” without a calculation.
The most important number is the estimated amount the insurer may keep, sometimes called the retained premium. The estimated short-rate charge is only the extra amount above the premium earned for the days already insured.
A proper cancellation estimate should show the policy start date, cancellation date, days in force, retained premium percentage, retained premium amount, premium paid to date, and refund or amount owing. If someone tells you the cancellation cost is “about one month of premium,” ask for the actual calculation.
| Example timing | Pro-rata used | Broker-style estimate | What this means |
|---|---|---|---|
| After 30 days of a 365-day policy | About 8.2% of annual premium | Earned premium plus about 11 remaining months × 1.25% | On a $2,400 annual policy, the short-rate charge estimate is about $330, plus earned premium. |
| After 90 days of a 365-day policy | About 24.7% of annual premium | Earned premium plus about 9 remaining months × 1.25% | The early-cancellation cost can still be meaningful in the first few months. |
| After 182 days of a 365-day policy | About 49.9% of annual premium | Earned premium plus about 6 remaining months × 1.25% | Halfway through the policy, the retained amount may still be higher than pro-rata. |
| Close to renewal | Most of the annual premium has already been earned | Short-rate charge is usually smaller because fewer months remain | Close to renewal, the remaining refund may be small. |
Important disclaimer: This calculator provides an estimate only. It uses a broker-style short-rate estimate based on the earned premium plus 1.25% of the annual premium for each rounded month remaining in the policy. Your actual cancellation amount could be slightly more or less depending on the short-rate table used by your insurer, minimum retained premium, policy fees, payment plan charges, taxes, NSF charges, or other adjustments.
Always ask your insurer, agent, or broker for the official cancellation calculation before cancelling. If you are switching insurance, do not cancel your current policy until the new policy is confirmed, bound, and effective. A gap in auto insurance can create serious problems.
How to use this cancellation calculator
This tool is meant to help you understand the math before you make a mid-term switch. It is not a replacement for your insurer’s official calculation.
Use annual premium
Enter the full annual policy premium, not just the monthly payment. Monthly payment plans can make cancellation math harder to understand.
Use the correct dates
Enter the policy start date, expiry date, and the cancellation effective date. One or two days can change the estimate.
Compare against savings
If your new quote is significantly cheaper, the savings may still outweigh the cancellation cost. The optional new quote field helps estimate that.
Ask your insurer for the actual short-rate retained percentage or retained premium for the exact cancellation date.
Short-rate vs. pro-rata cancellation
Cancellation fees cause confusion because customers often expect pro-rata, while Ontario auto insurers generally use short-rate when the customer cancels early.
Pro-rata
Pro-rata means you pay only for the actual time the policy was active. This is generally used when the insurer cancels the policy.
Short-rate
Short-rate means the insurer keeps more than the pro-rata amount because the calculation includes handling costs. This is generally used when the customer chooses to cancel early.
Minimum premium
Some policies may show a minimum premium on the Certificate of Automobile Insurance. That amount may not be refundable.
The cancellation fee is not always one month of premium. It depends on the date, premium, short-rate table, minimum premium, and insurer rules.
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