Does my car insurance renew automatically?
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UPDATED: Mar 19, 2020
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- In most cases, car insurance policies will automatically renew after the six or 12 month policy period
- Insurance companies will send you a renewal notice generally 30 to 45 days before the policy is set to renew
- Insurance companies won’t renew a policy if they consider the insured to be high-risk with too many points on a driving record or too many filed accident claims
- If you don’t want to renew your policy, you will need to send in a written cancellation request
- If your policy is not renewed for any reason, be sure to find new insurance before cancellation so you don’t risk having a gap in coverage
Most car insurance companies want their customers to continue being their customers, which is why they choose to renew car insurance policies automatically. By doing so, they allow their insured to stay covered even when the policy period is over.
Auto renewal can definitely benefit you, but there are some things you should know before letting it auto renew. Read on to learn how the process works and what you’ll need to do to ensure everything goes smoothly.
Car Insurance Policy Renewals
Most insurance policies last for a period of six or 12 months. Many people wonder what happens when that time period is over. In most cases, there isn’t much you’ll need to do. It is likely that your policy will just renew on its own and you will continue being covered.
Your insurance company is required by law to send you a notice of scheduled renewal. You should receive this notice 30 to 45 days before your current policy ends.
As long as you have a current credit card or another form of payment on file, the insurance will begin charging you for the new policy. You can also choose to pay the premium manually.
Changes to Your Policy
Be sure to thoroughly read the terms of the new policy before you let it renew automatically. You may need to make changes, and you must make these changes before the new policy begins.
A lot of times there will be an increase in your premium. Rate increases can happen for several reasons. For instance, your rates may increase if you had any late payments, traffic violations, or accidents within the six or 12 month policy period. Some insurance companies simply raise your rates every time it renews, based on the current insurance market.
How to Keep a Policy from Renewing
If you’d like to switch insurance companies, you must cancel your policy and/or request that your current insurance company not automatically renew.
You must provide a written request for cancellation. If you don’t receive a confirmation after a few days, you should call the insurance company to confirm they have received and processed this request.
Compare rates with other companies to find the best deals. There is nothing wrong with switching insurance companies to save money. Just be sure to give yourself plenty of time and send a written request to the insurance company before it is set to renew.
If you don’t want to renew, find and purchase a new policy as soon as possible. A gap in coverage have expensive consequences. Insurance companies will often raise rates of customers who have had a gap in insurance coverage.
There are also fines and penalties involved if you get caught driving without the state’s minimum insurance requirements.
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Reasons Why Car Insurance Wouldn’t Renew Automatically
Some customers will find run into an issue where the insurance company is not going to renew their insurance coverage. There are several reasons why this might be. If this is the case for you, don’t stress, but be sure to find a new policy before you are left stranded without insurance.
Auto insurance providers don’t want to insure drivers who are considered to be high-risk. If a company has enough evidence to believe a driver will cost more to them than they are paying in insurance premiums, they have the right to remove them as a customer. There are quite a few reasons they could determine a driver to be high-risk.
Too Many Accident Claims
Accidents are expensive. Though you pay for insurance to cover these costs, too many accidents can cost more than you are actually paying for in insurance.
An insurance company is a business, and they don’t want to lose money on their customers. If you end up needing to file several accident claims, especially within one policy period, your insurance company may drop you.
When driving, stay alert and drive safely. If you are involved in several car accidents, report as few claims as possible. Pay out-of-pocket for smaller damages that you can take care of without getting insurance involved.
A good rule of thumb is if the accident damage will cost less than your deductible, just have it repaired on your own dime. Doing this will help ensure your insurance company will renew your policy.
Major Traffic Violations and DUIs
More expensive accident claims. A policy will often not be renewed if a driver has received a DUI or any major violations. Any record of reckless driving can be a huge red flag to an insurance company.
Missed Payment or Non-Payment
Insurance companies don’t want to keep customers who don’t pay on time. If you pay your premium monthly, you’ll need to pay close attention to when payments are due.
Avoid late payments. Most insurance companies allow their customers to set up automatic payments so that this doesn’t happen.
Benefits of Auto-Renewal
Allowing your insurance policy to renew on its own is a huge convenience that can ease the stress of searching for and purchasing new coverage every time the policy period is up. If you are completely satisfied with your current policy, be sure it is set to renew.
In order for the renewal process to go smoothly, have the correct payment information on file and pay the premium on time. Be sure to cancel if needed before your renewal notice states, but don’t allow a gap in coverage either.
Compare and contrast insurance coverage before letting yourself get stuck paying more than you should. If you’re happy with what you have, simply let your insurance company handle the renewal process.
Start compiling policy quotes and choose the rate and coverage that works best for you. Use our FREE comparison tool below to get started!