All about car insurance renewal

Your auto insurance policy is up for renewal every time the policy term ends — and renewal time is also when you might learn your rates are going up. Here’s what you need to know about when, and how, to renew.

Logan SachonAnna Swartz 1600

Logan Sachon & Anna Swartz

Published December 10, 2019

KEY TAKEAWAYS

  • Your auto insurance renews at the end of the policy term, which is usually 6 or 12 months

  • Many policies will automatically renew, meaning you have nothing to do but continue to make your payments on-time and in-full

  • You may see a rate increase at renewal, which is why renewal is also a good time to shop around and see if you could be getting cheaper coverage

When you buy car insurance, you’re getting an auto policy that offers you a set amount of protection over the length of the policy term. Most auto policies last 6 months or 1 year — after that, your policy is up for renewal.

That basically means you have the option to continue your coverage. If you don’t renew with your current company, you’ll have to shop around for different car insurance coverage and make sure you have a new auto policy in place for when your current one expires.

For many drivers, renewing an auto policy is a simple process that doesn’t require much effort on your end. Your insurance company will notify you by mail or email when your policy is about to renew. Your insurer may then automatically renew your policy or prompt you to signal that your basic info is the same before renewing. You can usually do all of this online.

However things can get a little more complicated if you try to renew after letting your policy expire. Your insurer could also simply decline to offer you a new policy — this is called non-renewal.

In this article:

How do I renew car insurance?

Many car insurance policies have automatic renewal written into their terms, which is great if you don’t like to think about paperwork, but also means that your rates could go up without you noticing, if you’re not paying attention. If your car insurance company offers auto-renewal, renewing is easy because it happens automatically.

A month before your policy expires, you’ll get a letter from your insurance company about renewal, along with info about your new car insurance premium, a new declarations page and new insurance cards. If you do nothing (and keep making payments), your policy will automatically be renewed and new premium rates will apply on your renewal dates. The new rates are based on your driving history, your age, and other factors, including claim rates for your state — sometimes it’s possible for your rates to increase even if you’ve never made a claim or had any strikes against you.

If your car insurance is set to automatically renew and you feel okay about the new rates, you don’t have to do anything except continue to make payments and swap out your new insurance cards to keep in your wallet and glove box of your vehicle. And if your car insurance payments are automatic, they’ll most likely just continue into your new policy term, so you don’t need to worry about stopping and starting payments again

Some insurers may require you to sign off on your personal information before your policy renews. If this is the case, you’ll be prompted to look over your info when it’s time for renewal.

Why did my car insurance rates go up?

When you receive your notice of renewal, you’ll also get info about your new insurance premium. It may be more than what you were paying before, and there are a lot of reasons why this could have happened.

Car insurance rates are calculated based on a number of personal factors, and if any of those have changed over the course of your policy term, that can affect your premiums. Some reasons your car insurance rates have gone up might include:

  • You filed claims or had claims filed against you
  • You had an at-fault accident or a traffic violation
  • You moved to a new ZIP code
  • The market at large changed, for example, accident rates went up or the insurance industry experienced large losses

If your premiums go up when your policy renews and you’re not happy with the change, you may want to shop around for new auto insurance. If you find identical coverage for a lower price, it might be time to switch carriers, in which case you won’t want to renew your current coverage.

Learn more about why your car insurance rates went up

How to decline your car insurance policy renewal

If you get a notice that your car insurance is about to renew but you don’t want to continue with your current coverage, you have two things to do: let your current insurance company know you don’t want to renew your policy and buy a new policy that takes effect before your current policy ends.

Declining to renew your policy is equivalent to canceling your auto insurance policy. How to do it depends on your insurance company. Some will let you cancel over the phone, others will want a letter stating your intent to cancel your policy.

However you do it, make note of your end-of-coverage date. If your insurance company declines to renew your auto insurance policy or you decide you want to switch companies, you need to get a new policy — and you need to get it before your current policy expires.

How to shop around for car insurance

Shopping around for a new policy to replace your current one is a similar process to when you first got coverage:

  • Decide whether you want to work with an independent agent or search on your own. You can get quotes from carriers online, but working with an independent agent or broker means you only have to submit your information once, and an expert will be there to help you choose from multiple carriers.

  • Determine how much coverage you need. You may want to keep the exact same coverage you have now, or you may want to adjust your coverage limits and change the details of your coverage.

  • Fill out your application. Whether you’re working with a broker or not, you’ll need to submit basic info like your name, birthday, address, Social Security Number, car VIN and your declarations page from your most recent prior car insurance policy.

  • Get your quotes. You’ll get car insurance quotes pretty quickly. When comparing prices, make sure you’re looking at quotes for the same coverage amounts and policy terms so you know you’re comparing apples to apples.

  • Choose a carrier. You can look at reviews and third-party rating sites to help make your decision. Once you’ve chosen a carrier and purchased a policy, you can go ahead and cancel your current car insurance.

One note: Be sure to set the cancellation date of your old policy and the effective, or start date of your new policy on the same day. Insurance policies begin and end at 12:01 AM on a given date, so you want to make sure you don’t accidentally leave a one-day gap in your coverage.

Learn more about how to cancel car insurance

Can I renew my expired car insurance?

What happens if you let your car insurance policy expire and now you want to renew it? This situation is a little trickier than simply letting your policy automatically renew. If your car insurance has expired, that means you’ve let your car insurance lapse and you’re driving unprotected. Be sure not to drive until you’re covered again.

Your insurance company may be able to reinstate your policy, but you could be required to pay a penalty fee.

If you can’t reinstate your expired car insurance policy, shop for a new one as soon as possible. Having a lapse in car insurance coverage not only leaves you unprotected, it can also lead to higher premiums down the line.

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How car insurance non-renewal works

If you’ve had a large claim (like from a big accident); several small claims (like a small accident or two); if you’ve racked up several moving vehicle violations; or if you’ve been consistently late with your car insurance premium payments, your car insurance company may take any number of steps, including:

  • Raising your premiums
  • Canceling your insurance
  • Issuing a notice of non-renewal

Increased premiums is pretty straightforward — if you’re viewed as a risky driver, they’re going to charge you more. But what’s the difference between cancellation and non-renewal?

Cancellation voids your policy and can make it difficult to get insurance from any carrier in the future. Common reasons for cancellation are fraud or failing to pay your premiums, and cancellation can happen at any point over the course of the policy.

Non-renewal happens when it’s time to renew your policy. Your carrier might just decide it doesn’t want to continue covering you and decline to renew your policy. This can also be because of a broader business decision from the insurance company (for instance, if they are downsizing and not taking on as many policies). Unlike cancellation, it's easy to get covered after nonrenewal.

Companies must issue a notice of non-renewal before refusing to renew your policy. The notice will give their reasons for declining renewal, which you may be able to contest with your state’s insurance department.