Guide to Car Insurance Renewal

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.

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.

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.

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 rates with several companies to find a new policy.