Economical InsuranceCancellation Fee Guide
Official short rate table and cancellation fee calculator for Economical (Definity) Insurance policies
Economical Insurance, now operating under Definity Financial Corporation (the company rebranded in 2021), is a long-established Canadian insurer sold primarily through brokers. Many policies still carry the Economical name, and your documents may show either brand.
What makes Economical unusual is its cancellation method. Instead of the standard short rate table, it charges your pro rata earned premium plus a small flat penalty that shrinks as the policy year progresses — a structure that is easier to predict and often kinder to late-term cancellations.
How Economical calculates your cancellation fee
Economical adds a flat penalty on top of the pro rata earned premium: 7% in the first 180 days, 4% from day 181-270, and 2% after that. There is no steep daily curve — just the day-by-day value of the coverage you used, plus the penalty for the tier you fall in.
On a $1,200 policy cancelled after 90 days, the pro rata earned premium is about $296, plus a 7% penalty ($84) — so Economical keeps roughly $380 and refunds $820. Because the penalty is a flat add-on, a cancellation at day 300 only costs 2% above pro rata, where a traditional short rate table would still keep several points more.
How to cancel your Economical/Definity policy
Start with the broker who set up your policy, or contact Definity directly. Before you confirm, identify which penalty tier your cancellation date falls in — if you are close to a tier boundary, a short wait can lower the penalty.
- 1Contact your insurance broker first
- 2Or call Definity at 1-800-265-8665
- 3Provide your policy number
- 4Identify which penalty tier applies
- 5Get written confirmation of refund amount
Refund processing: 10-14 business days. Broker-initiated may be faster. Cheque by mail: 3-4 weeks.
Enter your premium to see dollar amounts below
Economical Insurance (Definity) Cancellation Fee Summary
Refund at key cancellation points, based on a $1200 annual premium
| Days in Force | Earned % | Amount Earned | Refund |
|---|---|---|---|
| 14 days | 10.8% | $129.60 | $1,070.40 |
| 30 days | 15.2% | $182.40 | $1,017.60 |
| 60 days | 23.4% | $280.80 | $919.20 |
| 90 days | 31.7% | $380.40 | $819.60 |
| 120 days | 39.9% | $478.80 | $721.20 |
| 180 days | 56.3% | $675.60 | $524.40 |
| 270 days | 78% | $936.00 | $264.00 |
| 330 days | 92.4% | $1,108.80 | $91.20 |
How Economical compares
Economical's flat-penalty method is the most transparent of the insurers we track and is noticeably kinder to late-term cancellations — after day 270 the penalty is just 2% above pro rata, versus the standard table (Aviva, CAA, Pembridge and others) which can still keep several points more near renewal. In the first six months its 7% add-on is broadly in line with the standard table's mid-term gap, and a little gentler than the steeper TD, Desjardins, or Intact schedules. The one thing to watch is the tier boundaries at days 180 and 270.
Tips to minimize penalties
- • Watch the tier boundaries — if you're near day 180, waiting until day 181 drops your penalty from 7% to 4%; the same applies at day 270 (4% to 2%).
- • Work with your broker — they may negotiate better terms or find pro-rata options on your behalf.
- • Request pro-rata — a vehicle sale, total loss, or move may qualify you for penalty-free cancellation.
Frequently Asked Questions
How much is the Economical Insurance cancellation fee?
Economical (Definity) does not use a standard short rate table. It charges your pro rata earned premium plus a flat penalty: 7% for days 1-180, 4% for days 181-270, and 2% after that. On a $1,200 policy cancelled after 90 days, the pro rata earned premium is about $296 plus a $84 penalty, so Economical keeps roughly $380 and refunds $820.
Is Economical Insurance now Definity?
Yes. Economical is part of Definity Financial Corporation, which rebranded in 2021. Many policies still reference the Economical name, and the cancellation calculation is the same under both names.
How do I cancel my Economical/Definity Insurance policy?
Contact the broker who arranged your policy, or reach Definity directly at 1-800-265-8665. Provide your policy number, identify which penalty tier applies based on your days in force, and get written confirmation of the refund amount.
Why is Economical’s penalty structure different?
Instead of a detailed daily table, Economical applies a simple flat penalty on top of the pro rata earned premium. This makes the math easy to predict and means late-term cancellations are often cheaper than under a traditional short rate table — after day 270 the penalty is only 2%.
How long does an Economical/Definity refund take?
Refunds are typically processed within 10-14 business days. Broker-initiated cancellations can be faster; a cheque sent by mail may take 3-4 weeks.
Sources & Verification
- ·Economical/Definity tiered cancellation method (pro rata earned premium plus a 7% / 4% / 2% penalty by term).
- ·Definity service line (1-800-265-8665) and broker channel for current cancellation procedures.
- ·Reviewed by the CostExpert editorial team. Figures are estimates — confirm your exact refund with Definity or your broker before cancelling.
Reviewed by CostExpert Editorial Team · Last verified June 2026
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