Key takeaways:
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Car insurance policies cover six months or 12 months at a time. You’ll receive a notice to renew your policy about a month before it expires.
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Many car insurance companies offer auto-renewal so your coverage doesn’t lapse.
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If you’d like to switch car insurance companies, you should do so before your current policy period ends.
Renewing your car insurance is usually an easy process, but it can get complicated if you need to amend your coverage or change auto insurance companies.
We’ll cover everything you need to know to renew your existing car insurance policy, plus how to shop around for new car insurance or switch insurance providers to make sure you get the best car insurance coverage.
Learn more: How does car insurance work: The basics explained
Most insurance providers have policy periods that span six or 12 months. When the policy period is approaching the last month, the insurance company will usually send advanced notice of your renewal alongside any changes to your car insurance premium or other adjusted terms.
You’ll have time to look over the coverage details, note any changes to the cost of your premium, and decide whether to continue with your current car insurance company or shop around for new car insurance.
Most insurance companies offer an automatic renewal process, so all you have to do is continue to pay your premiums in order to maintain continuous coverage. If you’ve set up automatic payments, all you’ll need to do us pocket your updated car insurance ID cards.
Because most car insurance companies do auto-renewal, you may still be covered by your previous policy even if you didn’t intentionally renew it. However, if your current insurance company doesn’t have automatic renewals, cancels your auto policy, or you forget to pay your premium, you could be looking at a lapse in coverage.
A lapse in auto insurance coverage can have serious consequences, including driver’s license suspension, expensive fines, and even jail time. Not only does it mean you might not be covered in the event of an accident, but it could also affect your credit-based insurance score, result in higher premiums, and make it harder to change car insurance companies in the future.
The good news is short lapses in car insurance coverage are fairly common, and most states have a grace period from 10 to 20 days for failure to pay premiums. If you forget to renew and your policy expires, call your insurance agent as soon as possible to get coverage reinstated.
When you get a renewal notice, it’s a good time to shop quotes online for car insurance and make sure your insurance cost is still reasonable. In fact, the Insurance Information Institute recommends getting at least three car insurance quotes from other auto insurers. While you can always switch companies at any time, it’s a little easier to change car insurance during the renewal period so you can avoid a cancellation fee.
Learn more: Does buying car insurance online save money?
Here are a few reasons you might want to consider speaking to a licensed insurance professional about switching insurance companies:
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You’d like reduced premiums. Everyone wants to save money on car insurance. Insurance carriers may offer incentives to switch and you can even bundle policies to earn discounts.
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Your auto insurer doesn’t offer the coverage you need. It makes financial sense to explore changing insurance carriers so you can get the type of auto insurance coverage you require.
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You’re disappointed with your insurance company. Not all auto insurers are created equal. Whether it’s issues with customer service, rate increases, or coverage limits, speak with a licensed insurance agent about finding new coverage elsewhere.
Learn more: How to switch car insurance companies
It’s true, your auto insurer can either refuse to renew or outright cancel your car insurance for a variety of reasons. Here are the most common:
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Changes to your driving record or license suspension
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A history of late payments
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Insurance fraud
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Frequent car insurance claims
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Changes to your driving history
It’s also possible your insurance company stops offering coverage in your area or no longer provides coverage for specific types of motor vehicles.
There are differences between an insurance company deciding to cancel or simply opting not to renew your policy, though in both case, you’ll need to move on from your previous insurer and come up with a new car insurance plan.
Insurance companies are not allowed to cancel a policy if it’s been in effect for more than 60 days except for serious infractions such as insurance fraud, driving suspension, or failure to pay. If this does happen to you, you’d need to find a new auto insurer immediately, usually the same day, in order to avoid a lapse in coverage.
With non-renewals, most companies provide advanced notice and a reason they are opting not to renew your car insurance. As with cancellations, you can usually speak with your insurance carrier to appeal the decision, and they may reinstate your policy albeit with higher premiums.
Data from the U.S. Bureau of Labor Statistics indicates car insurance rates rose significantly in the last year. It’s fairly common to receive a renewal notice that includes a rate hike, so pay attention to the fine print. Here are the most common reasons your auto insurance rate might increase:
If you’re not sure why your rate increased, call your insurance agent for more information and to see if you might qualify for additional discounts that aren’t currently being applied to your policy.
Learn more: Ways to save money on car insurance
If your policy has already expired, you may still be able to renew insurance coverage through your existing company. There are grace periods if you forget to renew your current policy or miss a payment, but they vary by state and insurance company.
Although the insurance company may be willing to reinstate your policy for a short period of time after the expiration, your insurance record may still reflect a lapse in coverage. You can also seek out a new car insurance carrier if your existing provider is reluctant to revive your lapsed policy, although you may have to pay a higher insurance price to secure coverage.
Read more: Here’s how to shop for car insurance
What happens if I don’t renew my car insurance and drive without it?
Penalties for driving without car insurance can be significant, including fees, jail time, license suspension, having your car impounded, and being required to file an SR-22, which results in being categorized as an at-risk driver and paying higher auto insurance rates.
If you’re simply renewing an existing auto insurance policy, you’ll just need to confirm the renewal and the payment method. If you have auto-renewal and your payment method is the same, you might not have to do anything. However, if the policy needs to be updated, reach out to your insurance agent and have all your vehicle and driver information on hand.
You’re free to switch car insurance companies whenever and as often as you’d like, but there are a few things to keep in mind. First and foremost, make sure to switch before your current policy ends so you don’t have any lapses in coverage. Secondly, ensure you won’t have to pay cancellation fees or other additional costs when you switch insurance providers.
Changing car insurance companies won’t have a major impact on your credit score. Keep in mind, however, that insurance companies may use your credit score to determine your auto insurance rate. Several states require you to be notified if your credit history has been reviewed as part of an insurance quote or rate adjustment.
Tim Manni edited this article.
