A contract with the insurance company will require that you pay for the policy. The insurance company agrees to cover your financial responsibility for an object in case of loss or damage. The insurance company charges a premium in dollars for this service. You pay the premium and you gain the coverage you need.
Frequently the agents and brokers have in-house payment plans. As well the insurance companies will offer many different payment options for this premium due.
Some of the payment plans include making one payment in full, partial payments with further payments on agreed dates or a monthly prepaid option. Some companies now offer two year insurance plans that would have a fixed amount for payment.
Depending on the circumstances a premium can be fully retained. If this is the situation then even if it is only part-way into the policy term when you wish to cancel the policy,you would have to pay the policy in full. This can occur with recreational vehicles or business which is seasonal. A motorcycle policy will likely not gain a refund if it is canceled mid-winter. The same is true of a snowmobile policy being canceled in the middle of summer. A snow removal company is likely to have a fully retained premium if that is their only operation.
When you have a claim you may received payment if you accept an actual cash value settlement. Also you may have purchased items that were lost, submitted receipts and now be receiving payment for these expenses.
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