When a policy ends early, the insured is owed the unearned premium, and the Insurance Code sets deadlines for returning it.
Ins. Code §481.5:
Personal lines, such as homeowners and auto: tender the gross unearned premium within 25 business days after the insurer receives notice of the event (§481.5(a)).
Other policies that are not auditable, such as a commercial liability policy: within 80 business days (§481.5(b)).
Unearned premium tendered late bears interest at 10 percent per year (§481.5(d)).
Premium finance (§673): when a premium finance lender holds the insured's assigned right to cancel and the insured defaults, the lender mails written notice to the insurer and the insured. The effective date of cancellation must be at least five days after the notice is mailed (§673(c)). A separate 10-day notice applies to an industrial loan company. When a financed policy is canceled, §673(g)(2) generally requires the insurer to calculate the return premium on a pro rata basis.