Car insurance renewal guide: What you should know

How to renew your car insurance

In most cases, you won't have to do anything to renew your auto insurance. It will automatically be renewed.

“Pretty much any policy that we write automatically renews. There’s really nothing that the client needs to do,” says Josiah Hatch, owner and CEO of Bender Hatch Insurance in Boston, Mass.

However, there are still a few steps you should take during the insurance policy renewal process, with the example of a driver we'll call Gabriel:

1. Review your renewal paperwork. Gabriel looks over his renewal documents for any changes in rates and goes over his coverage. His current full coverage policy is as follows:
   • Liability: 50/100/50
   • Comprehensive and collision deductibles: $500
   • Other: Gabriel carries uninsured/underinsured motorist coverage with limits that match his liability, rental reimbursement and roadside assistance
   • Annual rate: $1,200
2. Reach out to your insurance agent or company representative if you have concerns about coverage or rates. Gabriel calls his insurance agent because his insurance rate has gone up by $200 a year. He's told it's a company rate increase that has nothing to do with him. After reviewing his needs, he decides to keep his current limits.
3. Request quotes from other auto insurance providers. Renewal is a good time to compare quotes and make sure you're getting the best deal. Gabriel requests quotes from three companies at the same coverage levels. The lowest quote he receives is $950 a year, $250 less than his current coverage. The quote is from a reputable company.
4. Finalize your renewal or buy new coverage and cancel. If everything looks good with your current policy, you generally don't have to do anything. However, Gabriel doesn't want to pay more than he has to, so he decides to switch. He signs up for the new policy as of his renewal date, and notifies his current company that he does not plan to renew.

Does car insurance automatically renew?

Most car insurance policies do renew automatically. It's unusual for the policyholder to have to do anything at renewal, unless there are questions about drivers in the household, driving records or some other issue.

All major insurance providers renew their auto insurance policies automatically, as do most small companies. Unless there's an issue with your renewal, your policy will likely auto-renew.

What if you don’t want to renew your auto insurance?

You should notify your insurance provider if you don’t want to renew. You can do this over the phone or in writing; in some cases, you can do it online. If you decide not to renew, ensure there’s no risk that your coverage will lapseWhen your auto insurance coverage ends because you missed a payment or did not renew it on time. A lapse in auto insurance coverage may result in paying higher premiums for a new policy..

You must have a new policy lined up to kick in the day your old policy ends. Remember that if you don’t notify your provider that you don’t plan to renew may wind up paying for two policies if they overlap. Or, if you simply don’t pay the bill, it could wind up on your credit history. Contact the company before the renewal date to ensure coverage and payments end.

In many cases, your new insurance company will notify the old one for you, but it’s best to confirm.

Do you have to pay to renew your car insurance?

You will need to pay your premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. to renew your car insurance. It's up to you if you want to pay the entire premium upfront or make payments.

If you were already paying monthly, those monthly payments will continue. However, if there has been a rate increase on renewal, your monthly payment will go up.

When to renew car insurance

Car insurance policies will renew every six or 12 months. You’ll be informed of your term length when you first take out the policy. If you’re unsure, look at your policy documents, which outline how long the term is and when you should expect a renewal notice.

Although annual renewals were once common, these days, it’s more common to have a six-month term. 

What does it mean to be non-renewed by the insurance company?

A non-renewal means that your insurance company will not renew your policy when it ends. That means your coverage ends on the last day of the policy term. Insurers must notify you, in writing, that they plan to non-renew your policy, with enough time to get a new policy. So you’ll be notified well in advance.

You can’t be non-renewed for just any reason. “There’s a very short list of levers [insurance companies] can pull to get off a policy midterm. In terms of a non-renewal that could be any number of things. It could be due to points on your license, [or] if you haven’t gotten a…license [in your new home state],” says Hatch.

Getting car insurance after a non-renewal can be difficult, depending on why the insurance company dropped you. If you have racked up tickets and accidents, the odds are good that other insurance companies will also see you as high-risk. However, not all insurance companies look at your record the same way, so your best bet is to request quotes from as many insurers as possible.

How to get car insurance after non renewal

If your car insurance has been non-renewed, it will likely be harder to get coverage somewhere else. Non-renewal usually happens because the risk of insuring you has grown beyond what the insurance company is willing to take on.

To find new coverage:

• Contact a local insurance agent. A local agent will be able to advice you as to which car insurance companies are will to take on higher-risk drivers.
• Request quotes from multiple companies. Rates are likely to be higher for high-risk drivers who have been non-renewed. It's important to compare rate from as many companies as possible to find the most affordable coverage.
• Consider your state's assigned risk pool. If you have been turned down or can't find affordable insurance, reach out to your state's automobile insurance plan. These plans spread the risk by assigning high-risk drivers to insurance companies, and are a last resort option.

What to do if your car insurance rates increase on renewal

If your car insurance rates are going up on renewal, you should first contact your insurer. Ask about the reason for the increase and any options to get the rate back down.

You should also start shopping around; request quotes from multiple companies to compare. You could get cheaper car insurance rates than what you were paying even before the renewal by shopping around.

You can switch car insurance companies anytime, so there is still time to shop around, even if the new rate has already kicked in.

Helpful auto insurance tools and calculators

• Car insurance rates by vehicle
• Compare car insurance companies
• Auto insurance coverage calculator
• Speeding ticket calculator
• Traffic ticket calculator
• Used car insurance calculator
• Rideshare earning calculator