Blog Car Insurance Renewals : Things To Consider Before Renewing Your Policy

Sep 1, 2020

What You Need To Know About Your Car Insurance Renewal

White car driving down country road

Car insurance renewal is an opportunity for drivers to save money and reassess their coverage needs. However, the majority of drivers simply allow it to auto renew.

A recent survey conducted for the Financial Services Commission of Ontario found that 52% of drivers paid their insurance or took no action to explore other options.

Failing to take action and compare Ontario car insurance options when it is time to renew your policy could be costing you hundreds of dollars per year. Ready to take action? Not sure where to start? We’ve got you covered.

The following will provide you with information about how to renew your insurance, things to consider, tips to save, and answers common questions about the process.

What Is A Car Insurance Renewal?

Standard renewals will be one year from the date it became effective. At the end of the term, it will be up for renewal and you will receive a notice with information about your premium.

There are a number of things that can happen when you get your notice in the mail :

  • No change : Your rates stay the same.
  • Increase : Your rates increase.
  • Decrease : Your rates decrease.
  • Cancellation : Your policy is not renewed by your insurer.

You also have the option to switch to another provider.

What Is The Car Insurance Renewal Process?

Whether you are getting coverage direct through a company or a broker, it will follow these steps :

  • You receive your notice in the mail : Most insurers will send you a new policy in the mail about 30-60 days prior to your renewal date.
  • Review your new terms and premiums : You have the opportunity to review the terms of your new plan for the upcoming year.
  • Auto renewal - no action is required to continue with your insurance : If you are in good standing, no action is required by you, unless you want to make changes.
  • Your coverage continues : You pay your full premium or allow the current payment schedule to continue.

Does Your Car Insurance Renew Automatically?

Most policies renew automatically if you continue to have a good driving record and you make your payments. While there certainly can be instances where no action is required (no change or reduction in rate, no information to update), too many drivers fail to review the information.

Automatic renewals are easy, but it could also be costing you money. Never assume your new plan is the best price or the coverage meets your needs. When it is time to renew your plan, it is an opportunity to see what other insurers have to offer.

A lot can change in a year - your driving needs may have changed, you may qualify for new discounts, and rates may be lower with other insurance companies.

Even if you intend to stay with your current insurer, still take the time to check rates. Comparing is the single best way to see what the market has to offer. Plus, you may be surprised about how much money you can save – especially if it’s been a few years since your last car insurance quote.

Why Did My Rates Increase At Renewal?

It’s not uncommon for drivers to see their rates increase, even with a clean driving record. Here are some reasons why you could see an increase when it is time to renew :

Even if you are claims free and didn’t have any tickets, your premiums could still increase. Rate increases can happen due to increased claim activities, insurance fraud, and changes in the market.

Check with an insurance broker before renewing will help you get the cheapest Ontario car insurance every time.

What Do You Need To Consider Before Renewing Car Insurance?

Here are some questions to consider that could impact your new premium for the year :

  • Do you commute? How far do you drive each day? Has your daily driving distance changed recently?
  • Do you use your car for business?
  • Who drives your vehicle? Do you need to remove or add an occasional driver?
  • Have your coverage needs changed? Do you need to increase or decrease limits?
  • Do you have winter tires?
  • Have you added any upgrades to your vehicle (stereo, auto car starter, tint, aftermarket accessories)?
  • Have you recently upgraded the vehicle security, such as an anti-theft device?

What Information Do You Need To Update When Your Car Insurance Renews?

Renewal time is also an opportunity to update your information with your broker or insurer, such as :

  • Mailing address : Your postal code impacts the price.
  • Contact information : Ensure your phone number and email address are up to date.
  • Vehicle usage : If you change how you use your vehicle, notify your insurer.
  • Car modifications : Any changes to your vehicles engine or physical appearance should be reported to your insurer.
  • New drivers : Let your company know of any new drivers in your home that will be using your vehicle.
  • Tickets : You are required to inform them of traffic convictions, license suspensions, and accidents.

What Happens With A Insurance Renewal After The Due Date?

While a renewal of your policy after the due date is possible, it can be difficult. You may be forced to pay a late fee or face higher rates because of a gap in insurance.

When it is time to renew, it’s important to make your payment on time. If you fail to pay by the due date, your coverage could be temporarily suspended or cancelled. You’ll also be driving without insurance.

What Happens If Your Car Insurance Renewal Was Declined?

In most cases it is not renewed due changes of your driving record or history. If you’ve been involved in an at-fault accident, have been convicted of a major traffic violation, filed too many claims, or have had payment issues, you could see a cancellation.

If this happens, you may need high-risk insurance.

Can You Switch Your Car Insurance Before The Renewal Date?

Open hatch of SUV with luggage and kids playing in it

Many drivers incorrectly assume they cannot switch before it is time to renew thier car insurance. This is not true - you can switch at any time. However, it may or may not be a good idea depending on your situation, how long you have left on your contract, and other factors.

Changing early could result in a penalty or administrative fees. You will also be required to follow the cancellation procedures as outlined in your policy.

Depending on the savings from your new plan, it may or may not make more sense to wait. Switching insurers during the renewal process is simpler, you won’t face penalties, and it’s your best time to take advantage of cost savings.

A insurance calculator can help you determine if renewing with your current provider is the best decision. It can also help you determine if switching mid term is the right move to save money.

Compare Before You Renew Your Insurance

Each year you have the opportunity to renew your coverage and find more budget-friendly options. Rather than auto renewing, check from from multiple providers to see if you can get a better rate. It’s your chance to shop around and compare quotes.

Insurance Renewal FAQs

Here are some of the most commonly asked questions about the process :

Your renewal premium is the money you pay to your insurance company to continue your current insurance. You can pay full or monthly.

Insurers will send you a notice in the mail or online when your policy is nearing expiration. Generally, you will receive this notice 30 days or more before it expires. During this period you will need to decide to renew or switch to a different insurer.

Your renewal date is listed on your policy and proof of insurance pink slip. It’s important to renew or switch before your renewal date to avoid a gap in coverage.

Car insurance renewals are typically for one year in length. Some companies may offer policies for 6 months. Contact your insurer for more information about short term or temporary insurance.

If you are satisfied with your current insurance, you can complete the renewal before the due date. Simply notify your insurer once you receive your notice.

Cancelling before the renewal date could make you subject to a cancellation fee. You could also create a gap in your insurance if you have not secured with another provider which could impact future costs for you.

No. Once your policy expires, you no longer are insured and you are not legally allowed to drive the vehicle. Always take action, renew or cancel it and go with a different company when you receive your renewal notice.

How early you can renew your policy depends on your insurer. Most companies will allow you to renew 30 to 45 days prior to expiring. Check your documents to confirm.

Most renewals are completed automatically. If you are considering switching, you can compare quotes to see what your best options are.

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