When your car insurance is up for renewal, you’ll receive a notice from your insurer with your updated rate. All you need to do to renew is make a payment.
In most cases, renewal is essentially automatic — but letting your policy auto-renew could mean missing out on hundreds of dollars in car insurance savings.
Most car insurance policies auto-renew
Does insurance renew automatically? Generally, yes. Depending on the state, you usually don’t need to learn how to renew auto insurance because it’s done for you.
Auto insurance policy terms usually last for six or 12 months — and most are set to auto-renew. Here’s a breakdown of how the auto-renewal process generally works:
- One month before renewal: You’ll receive a reminder notice via email or mail from your car insurance company.
- At renewal date: Review the new policy document, including the declarations page and your new rate, to be sure you’re still happy with your policy and car insurance premium. You may need to sign off on your personal information before the auto-renew completes depending on where you live. Then, your payment will process automatically before the expiration date.
- After renewal: Replace the old insurance card in your wallet or glove box with the new one.
If your policy is due to auto-renew and you’re comfortable with the rate, all you need to do is make a payment to renew your coverage. Auto-renewal is beneficial for many drivers, and can help you avoid a lapse in car insurance coverage.
Auto-renewals are easy — but they could trap you into a higher rate
Automatic vehicle insurance renewals are hassle-free, but they can also mean that you may not notice your car insurance rates rising — which means you’re missing out on potential savings.
When you get your renewal notice, take a moment to check it against your current policy. If your rate has increased, shop around and get free car insurance quotes from other providers to ensure you’re always paying the lowest rate.
To help you get started, our experts at Jerry have gathered average monthly rates for some of the cheapest providers in the nation.
|
Insurance Company
|
Avg Monthly Quote
|
|---|---|
| Grange | $110 |
| Freedom | $152 |
| Aspire Advantage | $164 |
| New York Central Mutual | $172 |
| Anchor General | $178 |
If you don’t see your desired insurer on the list, try using the Jerry app, where you can build your account and run quotes from dozens of providers tailored to your specific driver profile. This way, you’re always sure to be receiving the best rates possible, whether it’s with your current provider or another insurer.
Learn more: How to get same day car insurance you can trust
Car insurance non-renewal vs. cancellation
Non-renewal happens at the end of your policy term if your insurance company chooses not to continue offering you coverage. This is different than a cancellation, which can happen at any time in the policy term after being initiated by you or your insurer.
Car insurance non-renewal
Most states require insurers to notify you of a non-renewal ahead of time so that you can get the proper coverage in place before your policy closes.
Common reasons for non-renewal include:
- Having too many risk factors on your record, like driving violations or accidents.
- Failure to pay insurance premiums.
- Providing false information to an insurance agent.
- License suspensions or revocations.
- Medical issues that make driving dangerous.
Car insurance cancellation
Either you or your insurance provider can cancel your policy at any time during your policy term. If you choose to cancel it in the middle of a policy period, you may receive a prorated refund for any prepaid premiums. But if your insurer cancels your policy, you may face more obstacles in obtaining coverage elsewhere.
Depending on the state you live in, your insurance company can only cancel a policy for specific reasons, such as:
- Suspended license.
- Non-payment of premiums.
- Misrepresentation.
- Fraud.
In some cases, you may choose not to renew your policy
It’s perfectly normal for a driver to choose not to renew their policy and switch to another company. Many people switch because their rates went up or they didn’t like the service provided. Other reasons may include:
- Your credit score going up, increasing your rate.
- You want a type of insurance that’s not available with your current company.
- You want discounts that aren’t available with your current company.
Regardless of who chooses to close your policy, it’s important to always line your expiration date up with the start date of your new policy. If your existing policy ends before your new coverage starts, you will be uninsured, and your rates may increase at your next renewal as the result of the lapse.
A lapse in coverage can lead to higher rates
Depending on how long you’ve been without coverage, you may be able to ask your insurer for a policy reinstatement. Either way, when you do regain coverage, you may see higher than average rates due to your temporary lack of insurance.
Other reasons why your car insurance might go up at renewal
Your driving history directly impacts rate hikes. So if you’re surprised by a higher rate during your policy renewal, one of these reasons might be the culprit:
- You recently filed a claim.
- You caused an accident.
- You were ticketed for a violation.
Here are some of the increases drivers with different violations pay for coverage in the U.S.:
| Driving Violation | Increase in State Min. Coverage | Increase in Full Coverage Cost |
| No Violation | Baseline | Baseline |
| Careless Driving | 19% | 34% |
| Cell Phone | 43% | 80% |
| Driving on Sus. License | 9% | 23% |
| DUI | 2% | 16% |
| Failure to Obey Traffic Sign | 11% | 18% |
| Illegal Turn | 25% | 36% |
| Improper Passing | 2% | 31% |
| Reckless Driving | 195% | 187% |
| Speeding over 15 | 12% | 21% |
| Speeding under 15 | 36% | 1% |
| Suspension | 7% | 19% |
| Wrong Way/Wrong Lane | 40% | 74% |
Companies will check your driving record every time your policy is up for renewal. If you’ve gotten more risky, your rates will rise. Here are some of the sources that companies consult when setting your rate:
- CLUE reports: Your Comprehensive Loss Underwriting Exchange (CLUE) report lists any car insurance claims from the past seven years. Recent claims on your account count as risk factors that can drive up your rates.
- MVRs: Your Motor Vehicle Report (MVR) lists any traffic violations, car accidents, driver’s license points or suspensions, or DUI convictions on your driving record — any of which can lead to higher premiums.
- Vehicle mileage: Your insurer will check the mileage of your vehicle and may adjust rates based on their findings.
- Discount eligibility: As part of the renewal process, your insurer will check your eligibility for various car insurance discounts, such as the no claims bonus — which could raise or lower your rates.
If your rate is much higher than expected, it’s possible that a mistake was made. You should pull your own driver records from your local DMV to check them for mistakes. If you find one, reach out to correct them and then follow up with your insurance company.
Of note: It’s not only violations that can cause your premiums to rise. You may also see your new rates go up if you moved to a new ZIP code with a higher risk profile, or add a new driver or vehicle to your existing policy.
Policy up for a car insurance renewal? Re-shop instead
Instead of automatically accepting your car insurance renewal, re-shop it. It’s always better to re-shop your plan than renew it without checking for lower rates.
Here’s how to renew car insurance by re-shopping:
- Download the Jerry app: With Jerry, re-shopping is automatic, and you’ll always be able to review your quotes before settling on the best plan for you.
- Adjust your coverage: Renewal is a great time to reevaluate your coverage limits and add-ons. Consider raising your deductibles or adding optional types of car insurance like roadside assistance.
- Check for discounts: Other insurers might have better discounts, such as those for auto and homeowners insurance bundling or good students, that could lower your premium amount.
- Don’t cancel without a new policy set up: If you choose the cancellation route, be sure to compare quotes in advance of your renewal date and set up your new insurance before canceling the old policy.
- What if I don’t find a lower rate? Congratulations! If you’re not able to find a cheaper policy online, your renewal rate is likely the best option.
FAQ
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What does auto insurance renewal mean?
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What is the average cost of car insurance renewal?
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Why would an insurance company refuse to renew?
Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.
Bonnie Stinson is an insurance writer with 8+ years of experience as a content writer. They specialize in making complex topics like insurance and technology easy to understand. Bonnie has written over 1,300 articles to help people become confident car owners, from how to choose the right car and build a car insurance policy to dealing with stressful situations like car accidents and unexpected repairs. Before joining Jerry’s editorial team, Bonnie worked as a digital media strategist and user experience researcher, producing content for Furnishr, STACKEDD Magazine, InfinityCore Health, and the global non-profit Giraffe Heroes.
