FL and SC law forbids cancellation within 60 days of inception without proof of duplicate/alternate coverage or other valid reasons.
Check your laws for a list of valid reasons. The insurance company can't "lead" you with the reasons allowed, you have to provide the reason for cancellation. If you buy from company A today @ $1200/six months and next week find a policy from company B for $900.00/six months, then BUY IT! Call company A back and tell them that you have purchased a policy from company "B", provide the company name and policy number and get your refund from company A!
A few bad apples spoiled the WHOLE bucket on that. Too many people were buying a policy, getting the ID cards, and cancelling the policy. They'd have "proof of insurance" in the vehicle, even though the policy was NO LONGER valid!!! They were driving without insurance, and getting into accidents, leaving the rest of us vulnerable!
It was NOT the insurance companies fault that people were doing that, and the laws were changed for this. It was (some) customers!
In regard to "post purchase rerates" and "cancellation fees":
1. ANYTIME you get a quote/buy a new policy, with ANY COMPANY there is a "discovery period" where the underwriting investigation is done. Most of the time today, with modern technology MVR, Credit, Verification of Previous coverage and Claims reports can be verified at purchase. But, if a state system is down, and the company can't pull the MVR (or other report), and you indicate that you have no accidents, violations or claims, the policy will start with that information.
However, once the MVR, Claims, Credit, or whatever report(s) that may not have been able to be verified at the time of purchase finds "other" information, rerate(s) will occur.
2. If a rerate occurs, and it is the result of an error, contact your insurance carrier for the contact information to dispute the information. Just like errors can occur on credit reports, they can occur on MVR, Claim and other reports that are used to establish the premium owed. You will want to clear that from the current carrier's records, AS WELL AS the reporting agency's records, so that the issue won't be a recurring issue in the future, when you renew and/or purchase a new policy.
3. Granted, not every insurance company charges a "cancellation fee", but it is NOT uncommon. Regardless of which insurance company you do business with, ALWAYS check the terms and conditions. If you accept them, without reading them, you are still legally bound to them. Some states do not allow this, MN, MI, TX, IL, NJ are a few of them... but others will allow for this, and the cancellation fee will either be a "flat fee" regardless of how much time is left before renewal. Other's will allow a percantage of the leftover premium. So, if 50 days of premium left at $5.00/day for $250.00 of premium, then $25.00 cancellation fee deducted from refund, or if only 6 days of premium left at $5.00/day for $30.00 of premium unpaid, then $3.00 cancellation fee. This is especially important to watch if the cancellation fee is a flat rate! If the CX fee is $50.00, but only 2 days of the current term left, at $5.00/day, then you'd owe MORE for cancelling than to keep the policy for two more days.
You need to make the decision, pay $10.00 for two more days of coverage, or cancel early and have $10.00 credit with $50.00 fee, to pay $40.00 more for two days less coverage.
Don't get mad at anyone but yourself for not knowing what is disclosed in declaration pages and terms and conditions, and coverages selected!
It is NOT uncommon for insurance policies to be purchased at "state minimum" liability coverages. In FL, the lowest Bodily Injury Limits without declining the coverage is: $10, 000 per person/$20, 000 per accident cap.
If that is what someone has purchased, even if they are driving a 1984 Ford Escort, and hit someone else who has medical bills as a result of the accident, $10, 000 will be very easily exhausted! If they hit someone and cause $50, 000 in medical bills, but have only purchased $10, 000 in coverage, that driver will still be responsible for $40, 000 in medical bills!
A 1984 Ford Escort can still cause just as much damage/injury as a 2010 Focus, 2010 Chevy, et al.
Liability limits are NOT insuring the vehicle! Liability limits are insuring against the damage/injuries the vehicle can cause!
Call your agent/company to make sure you have enough insurance! One week in the hospital today can easily cost $100, 000! If you only have $10, 000, $25, 000, $50, 000 in liability coverage, you are UNDERINSURED, unless you have a million dollars in the bank! You can be sued, garnished, or have your assets and bank accounts of various types seized in a lawsuit if you don't have enough insurance!