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Your guide to car insurance renewal

When the end of your car insurance policy approaches, you have two choices: renew this policy or shop for a new one. Here’s how to deal with car insurance renewal and what happens if you can’t renew your policy.

Key Takeaways

  • Most insurance companies offer auto-renewal, which makes the process convenient and low-hassle
  • You should get notified about a month before the policy term is up and you'll be sent new policy documents to review
  • If a company is not renewing your policy, they must notify you 10 days prior to the policy term expiration date
  • You can always compare rates from other companies to make sure you're getting the best rate

How to renew your car insurance policy

Most car insurance policies have a policy period lasting either six or 12 months, depending on the length the company offers and for which you signed up. The last day your policy is effective is called the expiration date, and at that point, you can renew your policy. Most auto insurance companies offer automatic renewals, meaning that if you wish to continue coverage, simply take no action to stop the renewal and continue making your payments. If you are enrolled in autopay, the insurer will take your scheduled payment via the method on file (your credit card, checking, savings or debit information). As long as you are in good standing, your car insurance company is likely to automatically offer you a policy for the next term. This is convenient for many, as it is low-hassle; it's not necessary to fill out any more paperwork or take any action to ensure that they remain covered.

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Typically, about a month before your policy’s expiration date, your insurance provider will contact you with your renewal offer, with the same limits and parameters of the policy that you previously enjoyed. This message will contain your new policy documents: the new effective dates, the new declarations page and ID cards, and your new car insurance premium. Making your regular payment signals the insurer to automatically renew your policy and continue covering you. The possible danger in automatic renewals is that car insurance premiums can increase without you noticing, even if there is no change in coverage or driving history. It’s important to read the terms of the renewal offer carefully before the new policy begins.


How to decline the offer to renew your car insurance plan

If you do not wish to continue coverage with the same insurance company, you must decline the renewal offer and apply for a new policy with a different carrier before the current policy’s expiry date. Contact your provider to let them know to end coverage on the expiration date of your current policy. Before the end of your auto insurance policy, you’ll need to shop around for a new policy with a new insurance carrier. The new car insurance plan should begin the same day as your policy end date, as the previous policy will stop coverage at 12:01 a.m. on the expiration date (insurance policies begin and end at 12:01 a.m. on any given date). As long as your new policy’s effective date is the same day as your old policy’s expiration date, you will avoid a lapse in coverage.


What happens if I don’t renew my policy and my coverage lapses?

If you begin your new coverage any time after the expiration date of the previous policy, there will be a lapse in coverage. You want to avoid a lapse in insurance coverage for several reasons:

  • You are unprotected throughout the lapse period.
  • A lapse in coverage can lead to higher premiums down the line.
  • New insurance companies might offer discounts for continuous coverage over a certain length of time; if you lapse, you will not be eligible for this discount.
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If your insurance provider does not automatically renew your policy and you let your policy expire before purchasing another, you will also experience a lapse in coverage. From the day your policy expires to the effective date of a new policy, you will not be covered and should not drive your vehicle. If you decide you want to renew your previous policy after all, your insurance agent may be able to reinstate your policy, though you may be subject to a penalty fee. If reinstatement is not an option, it’s time to shop for car insurance online.


What happens if my insurance company decides not to renew my policy?

If your insurance company decides not to offer you a policy renewal — whether it be because of payment inconsistency, insurance claims or moving violations — the company must inform you that your policy will not be renewed 10 days prior to your expiration date. This gives you time to shop for a new policy and avoid any lapse in coverage.


Car insurance cancellation vs. nonrenewal: what's the difference?

There is a difference between cancellation and nonrenewal, but both result in the end of coverage. Cancellation can occur at any point throughout the policy, and when issued by the insurer, is often the result of fraud or nonpayment. The insured can cancel a policy at any time without providing a reason. The auto insurance company must give notice to the insured if they are canceling coverage, and they also must provide the reasons for cancellation.

Nonrenewal occurs at the end of the policy term. If issued by the insurance company, it means they decided not to cover you for another term and are voiding coverage on the last day of your policy period. The insurer must provide notice to the insured, while if the insured decides not to renew, no advance notice is required.

Cancellation can occur at any time during the policy, whereas nonrenewal occurs at the end of the current policy term. Both require notification from the insurance company.


Why did my car insurance rates increase?

It is always possible for insurance rates to increase, even if you did not have any claims, accidents or violations. Insurance rates increase and decrease with industry trends. If the insurance company’s policyholders experienced a lot of losses in the last six months and the company is losing money, they may raise their premiums for even good drivers to recoup those losses. If you are unable to accommodate a rate increase, you are always able to compare auto insurance quotes with several companies to find a new policy.

Overall, renewing your car insurance is a relatively simple process. While most companies automatically renew, you will always receive some sort of notification once your policy is about to expire. Make sure to read the terms of your renewal offer carefully to ensure that all information is accurate and limits are set to your preferences. If at any time you need to shop around for a new insurance policy, The Zebra is here to help.

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RECENT QUESTIONS

Why did The General cancel my car insurance?

Insurance companies in many states have up to 60 days from the start date to cancel a policy without providing a reason for doing so. In most cases, this has to do with some sort of potential fraud or an inaccuracy on your application.
Mar 25, 2017 Gonzales, TX

If I am storing my vehicle and canceling my insurance policy, will I have to turn my plates back into the state?

If your insurance policy will not include liability coverage, then it's likely that New Jersey will expect you to return the plates and registration. You may have the option to suspend your registration until you return, but you will need to contact your local MVC for specific details on your options.
Jun 5, 2017 Cresskill, NJ

Will my insurance company pay for damage that I caused if my policy is cancelled?

If your policy was active at the time of the accident then they should still provide coverage for the damage. You can contact your insurance company or just wait for the person who owns the damaged property to contact your insurance company for repairs.
Dec 19, 2016 Grand Junction, CO

If I cancel my insurance is there a grace period after cancelation?

Sorry about your situation. Unfortunately, there is no grace period around dates.
Dec 8, 2019 Spring, TX

Renata Balasco photo
Renata BalascoContent Strategist

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist. Her expertise in property and casualty insurance informs her work in creating expert home and auto insurance guides to educate shoppers. 

Renata previously worked as a content specialist for Lifespan, the largest hospital system in the state of Rhode Island. She holds a bachelor’s degree in French Language and Communications from The University of Rhode Island.

Renata's work has been cited by Car and Driver, The Balance and Fox Business

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.