Economical InsuranceCancellation Fee Guide
Official short rate table and cancellation fee calculator for Economical (Definity) Insurance policies
Quick estimate
Auto scheduleRefund $820
Economical Insurance is the broker-channel brand of Definity Insurance Company, which was founded as the Economical Mutual Fire Insurance Company and issued its first policy on November 25, 1871. Policyholders voted to demutualize in 2021; the parent, Definity Financial Corporation, listed on the Toronto Stock Exchange in November 2021 and the insurer took the Definity name in December 2021. Definity reported more than $4.8 billion in gross written premiums for 2025 and 3,462 employees at December 31, 2025; it does not publish a customer count. Its head office is in Waterloo, Ontario. About 92% of its premium is written through independent brokers and the rest directly, and on January 2, 2026 it acquired the personal and most of the commercial insurance business of Travelers Canada.
For early cancellations Economical does not use a day-by-day short rate table. It charges the pro rata earned premium plus a flat penalty of 7% of the annual premium for cancellations in days 1 to 180, 4% for days 181 to 270, and 2% from day 271. There is no separate administrative fee.
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 to 270, and 2% after that. The retained amount is the day-by-day value of the coverage used, plus the penalty for the tier your cancellation date falls 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. At day 300 the retained share is 84.2% of the annual premium (82.2% pro rata plus 2%); the standard industry short rate table retains 86% at the same point.
How to cancel your Economical/Definity policy
Economical policies are sold through independent brokers, so the cancellation request is normally submitted through the broker who holds your policy; Definity can also be reached directly at 1-800-265-8665. Before confirming, identify which penalty tier your cancellation date falls in, since the date you specify sets the tier.
- 1Submit the request through the broker who holds your policy
- 2Or call Definity at 1-800-265-8665
- 3Provide your policy number
- 4Identify which penalty tier applies
- 5Get written confirmation of the refund amount
Refund timing is not published. Ask whoever processes the cancellation, Definity or the broker of record, when the refund will be issued and in what form.
Economical Insurance (Definity) Cancellation Fee Summary
Refund at key cancellation points, based on a $1200 annual premium
| Days in Force | Earned % | Refund |
|---|---|---|
| 14 days | 10.8% | $1,070 |
| 30 days | 15.2% | $1,018 |
| 60 days | 23.4% | $919 |
| 90 days | 31.7% | $820 |
| 120 days | 39.9% | $721 |
| 180 days | 56.3% | $524 |
| 270 days | 78% | $264 |
| 330 days | 92.4% | $91 |
How Economical compares
Retained share of the annual premium, Economical against the standard industry short rate table: day 30, 15.2% against 15%; day 90, 31.7% against 31%; day 180, 56.3% against 54%; day 300, 84.2% against 86%. A pro rata split retains 8.2%, 24.7%, 49.3% and 82.2% at the same points. Insurers with their own day tables retain more at day 90: Intact 34%, TD and Desjardins 36%. The day-by-day figures for every insurer are on our short rate table.
Not every cancellation carries the flat penalty: Definity's rules list situations that are refunded on a pure pro rata basis instead, such as a cancellation initiated by the insurer. The list is Definity's own, so ask which basis applies when you request the quote.
Before you cancel
- Tier boundaries — the flat penalty drops from 7% to 4% at day 181 and from 4% to 2% at day 271; the cancellation date you specify determines the tier.
- Two brand names — policy documents may show either Economical or Definity Insurance; the cancellation calculation is the same under both.
- Continuous coverage — the cancellation takes effect on the date you specify and premium is charged up to that date; a replacement policy starting the same day avoids a gap in coverage.
Frequently Asked Questions
How much is the Economical Insurance cancellation fee?
Economical (Definity) does not use a day-by-day short rate table. It charges the pro rata earned premium plus a flat penalty: 7% of the annual premium 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 an $84 penalty, so Economical keeps roughly $380 and refunds $820.
Is Economical Insurance now Definity?
Yes. Economical Mutual Insurance Company demutualized in 2021 and was renamed Definity Insurance Company in December 2021; its parent, Definity Financial Corporation, is listed on the Toronto Stock Exchange. Definity’s site states that Economical is becoming Definity Insurance, so policy documents may show either name; the same company issues both, and the cancellation calculation on this page applies under either name.
How do I cancel my Economical/Definity Insurance policy?
Submit the request through the broker who holds your policy, or call Definity at 1-800-265-8665. Provide your policy number, confirm which penalty tier applies to your cancellation date, and get written confirmation of the refund amount.
How is Economical’s penalty structure different from a short rate table?
A short rate table sets a retained percentage for each day of the term. Economical instead charges the pro rata earned premium plus a flat penalty: 7% of the annual premium in the first tier, 4% in the second, and 2% in the third. At day 300 that retains 84.2% of the premium; the standard industry short rate table retains 86% at the same point.
How long does an Economical/Definity refund take?
It depends on how the policy was paid: a refund against a pre-authorized payment plan is applied through your billing, while a cheque has to be issued and mailed. Definity does not publish a turnaround, so ask whoever processes the cancellation, Definity or the broker of record, for an expected date.
Sources & Verification
- ·Verified against Economical's Ontario auto underwriting rules in effect July 2026.
- ·Definity service line (1-800-265-8665) and broker channel for current cancellation procedures.
- ·Company facts (founding, ownership, premiums, employees) from Definity Financial Corporation’s 2025 Annual Information Form and corporate history page; see docs/carrier-facts.md in the site repository for the full ledger.
- ·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 September 2026
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