Sep 1, 2020
What You Need To Know About Your Car Insurance Renewal
Car insurance renewal time is an opportunity for drivers to save money and reassess their policy and coverage needs. However, the majority of drivers simply allow their policy to auto renew.
A recent survey conducted for the Financial Services Commission of Ontario found that 52% of drivers paid their policy or took no action to explore their insurance options upon renewal. 16% could not recall if they took action when their policy was last up for renewal.
Failing to take action and compare Ontario car insurance options when your policy is up for renewal could be costing your 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 car insurance, things to consider, tips to save, and answers common questions about the renewal process. First, let’s start by defining insurance renewals.
What Is A Car Insurance Renewal?
Standard auto insurance policies last for one year in duration. At the end of the term, your policy will be up for renewal. Your renewal is a new insurance policy.
Your policy renewal includes information about your premium and coverage for the upcoming year. It may or may not be more expensive than the previous policy. Your rates stay the same during the year until your next renewal unless there have been changes to the policy.
When Does Your Car Insurance Policy Renew?
Your insurance policy renewal date is based on when your policy started. Most policies last for one year. Therefore, your renewal will be one year from the date the policy became effective.
For example, if your policy started on March 30, 2018, it would be up for renewal March 30, 2019.
What Can Happen During Insurance Renewals?
There are a number of things that can happen when you get your insurance renewal 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 not renew your policy and switch your coverage to another provider.
What Is The Car Insurance Renewal Process?
Whether you are getting coverage direct through an insurance company or through a broker, a typical renewal follows these steps :
- You receive your policy renewal in the mail : Most insurers will send you a new policy in the mail about 30-60 days prior to your policy renewal date.
- Review your new policy terms and premiums : You have the opportunity to review the terms of your new policy for the upcoming year.
- Auto renewal - no action is required to continue with your policy : If you are in good standing, no action is required by you. Action is only required if you want to make changes to your policy.
- Your coverage continues : You pay your policy 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. You will receive a the policy renewal documents in the mail 30-60 in advance of the renewal date.
While there certainly can be instances where no action is required (no change or reduction in premium, no information to update), too many drivers fail to review their new policy. All drivers should, at the very least, review their policy.
Automatic insurance renewals make it easy for people to not be proactive about their policy. Too many drivers simply look at the cost and take no action beyond this.
Car Insurance Automatic Renewals Are Simple, But Potentially Costly
Automatic policy renewals are easy, but it could also be costing you money. Each time your policy is up for renewal is your opportunity to see what other insurers have to offer, and save money.
Never assume your renewal is the best price or your coverage meets your needs. A lot can change in a year. Driving needs may have changed, you may qualify for new discounts, and rates may be lower with other insurance companies.
The Best Piece Of Advice About Car Insurance Renewals
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 Policy Rates Increase At Insurance Renewal?
It’s not uncommon for any driver to see their rates increase, even those with clean driving records. Here are some of the common and foreseen reasons why you could see your insurance go up at renewal :
- At fault accidents
- Car insurance claims
- Traffic tickets and convictions
- Adding a new driver to your policy
- Increasing coverage limits
Even if you were claims free and didn’t have any tickets, your premiums could still increase at insurance renewal. Rate increases can happen due to increased claim activities, insurance fraud, and changes in the insurance market.
What Do You Need To Consider Before Renewing Car Insurance Coverage?
Here are some questions to consider that could impact your premium upon renewal :
- 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 add an occasional driver to your policy?
- Do you need to remove a driver from your policy?
- Have your coverage needs changed? Do you need to increase or decrease coverage 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? Added an anti-theft device?
What Information Do You Need To Update When Your Car Insurance Renews?
Insurance renewal time is also your opportunity to update your information with your broker or insurer. Here is some information to update :
- 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 : While you may be tempted to not tell your insurer, you are required to inform them of traffic convictions, license suspensions, and accidents.
What Happens With A Renewal Of Car Insurance After The Due Date?
When your car insurance policy is up for renewal, it’s very important to make your premium payment on time. If you fail to pay by the due date, your policy could be temporarily suspended or cancelled. You’ll also be driving without insurance.
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 coverage.
What Happens If Your Car Insurance Renewal Was Declined?
Has your insurance renewal been declined? Non renewals of policies can happen. Your insurer has the right to not renew your policy when your policy comes up for renewal.
In most cases it is not renewed due changes of your driving record or insurance history. If you’ve been involved in an at fault accident or two, have been convicted of a major traffic violation, filed too many claims, or have had payment issues, you could have your policy cancelled or not renewed.
If you your policy has not been renewed, you may need high risk auto insurance. Contact you insurer to find out why it was not renewed.
Can You Switch Your Car Insurance Before The Renewal Date?
Many drivers incorrectly assume they cannot switch before their policy is up for renewal. 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 policy, and other factors.
Changing before renewal could result in a penalty or administrative fees. You will also be required to follow all policy cancellation procedures as outlined in your policy. Learn more about how to cancel your car insurance policy.
Depending on the cost savings from your new policy, it may or may not make more sense to wait until renewal. 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 car insurance calculator can help you determine if renewing with your current insurance provider is the best decision for you. It can also help you determine if switching mid policy is the right move to save money.
Compare Before Your Car Insurance Renewal To Save
Each year you have the opportunity to renew your policy. It’s also your chance to see if you can save and explore your options.
When you compare renewal quotes, you give yourself the best chance to save. Rather than auto renewing, check from from multiple providers to see if you can get a better premium.
It’s your chance to shop around and compare quotes. Shop annually to put yourself in a position to save on coverage each year.
Insurance Renewal FAQs
Have more questions about the auto insurance renewals. Here are some of the most commonly asked questions about the insurance renewal process :
Your renewal premium is the money you pay to your insurance company for coverage to continue your current policy. You can pay the renewal premium in full or you can pay monthly.
Insurance companies will send you a renewal notice in the mail or online when your policy is nearing expiration. Generally, you will receive this notice 30 days or more before your policy expires. During this period you will need to decide to renew your policy or switch coverage to a different insurer.
Your policy renewal date is listed on your policy and proof of insurance pink slip. It’s important to renew or switch your policy 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 coverage.
If you are satisfied with your current insurance policy, you can complete the renewal before the due date. Simply notify your insurer once you receive your renewal notice.
Cancelling your policy before the renewal date could make you subject to a cancellation fee. You could also create a gap in coverage if you have not secured a policy with another provider.
No. Once your policy expires, you no longer have coverage and you are not legally allowed to drive the vehicle. Always take action, renew your policy 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 your policy 30 to 45 days prior to your policy expiring. Check your policy to confirm.
Most policy renewals are completed automatically. If you are considering switching, you can get online quotes to compare your policy options.
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