California Insurance Code (CIC) section 481.5 states in part that the gross unearned premium shall be tendered within 25 business days after the insurer either receives notice of the event that generated the gross unearned premium, or receives notice from a premium finance company of a cancellation.

We check with the CA Department of Insurance (DOI) to make sure this part of law would apply to a pre-paid car insurance premium and they responded yes it did. Their representative noted as we did above that California Insurance Code Section 481.5 requires the insurer to refund all unearned premium to the insured or to the insurance agent/broker within 25 business days after cancellation.

If the unearned premium is sent to the agent/broker, the refund is to be issued within 25 (calendar) days after the agent/broker receives the premium. An agent/broker who fails to return the premium within 25 days must pay the insured annual interest of 10 percent from and after the 26th day the agent or broker receives the refund. If the insurer or agent/broker is not in compliance with the above, you can complete the CA DOI form Request for Assistance so that they can investigate your refund situation.

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