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How Car Insurance Renewal Works

Auto insurance is critical to protecting yourself and other drivers on the road. You never know when an accident will happen, so being prepared is the best way to protect yourself financially and your fellow drivers. 

Part of maintaining insurance is managing your renewal when it comes up. An insurance renewal is when you agree to keep insurance through a specific company for another policy term. The terms typically last six months or a year, so the insurance company will send you paperwork to start another term with them once the last term expires.

How Does Auto Insurance Renewal Work?

When a driver signs up for an auto policy, they agree to an amount of financial protection over the policy term. The average policy term lasts six months or a year, depending on the insurance company. After that, the policy will be up for renewal. 

At renewal time, the company will reevaluate the data collected on your driving habits over the prior policy term. The process includes reviewing your accident record and any acquired tickets. They might also ask you to submit updated permit information for young drivers or your current mileage. Once they’ve gathered all this information, they’ll produce a premium for your next policy term.

Those with their policy set up on autopay for their policy term typically have the least to do. The company will send a letter outlining the new monthly premium about a month before it takes effect. Then the new amount will be deducted automatically like the term before. Those without autopay must check their renewal letter to know how much to send to cover their new premium. 

When To Renew My Auto Insurance Policy

For many drivers, auto policy renewal happens automatically. The insurance company will send a letter informing the driver that the renewal will occur about 30 days before the renewal date. If the insurance company plans to renew the policy, they’ll send the policyholder a letter stating their intent with their new premium. 

If the driver still likes the price and the terms, they can keep paying the policy as they did in the previous policy term. If they have any questions about their policy, they can call their insurance company to discuss their concerns with their agent.

Will My Rates Change With Auto Insurance Renewal? 

Any changes to your auto policy occur during the renewal period. Also, any chargeable items on your driving record, like new accidents or moving violations, will be accounted for and charged appropriately at that time. 

If, for example, a driver ran a stop sign and caused an accident during their prior policy term, The new policy price would reflect the ticket for running the stop sign and the at-fault accident in the premium for the new policy term. Some companies offer accident forgiveness, which means they don’t charge for the first accident on a clean driving record. 

Some drivers may also see their rate drop at renewal with the same coverage. The change is usually a result of the policyholder qualifying for discounts they missed the last term. The difference can also result from accidents or tickets charged against the policy aging out of the rating eligibility window, typically only five years.

Can I Renew An Expired Auto Insurance Policy?

Whether a driver can renew an expired auto policy depends on the company and how long the policy has expired. Occasionally, a policy that expired less than 30 days prior can be reinstated without penalty. Any policy that expired over 30 days is considered a lapse in coverage and requires a new policy. 

Drivers should know that some insurance companies offer discounts based on an active insurance policy for an extended period. A lapse in coverage longer than 30 days can reset the clock, making the driver ineligible for that discount. Losing access to a discount will cause their rates to go up when they sign back up for a policy.

If the policy lapses due to a lack of payment, the driver must call and make a payment before the 30-day time limit has expired. If the lapse is due to any other reason, the driver needs to settle the issue with the insurance company to prevent them from driving without insurance.

Do I Have To Renew My Auto Insurance Policy? 

Drivers are responsible for maintaining an active auto policy as long as they plan on operating a car. Therefore, drivers can change their policy anytime or switch companies whenever they see fit. For those that choose to renew their policy with their current company, all they have to do is allow their new coverage to take effect. 

If drivers want to switch their policy, they can contact their insurance company. Each company’s cancellation process is different, so they’ll have to check with their agent and follow their procedures. If you don’t wish to renew your policy but still plan to drive in the US, make sure you have another policy in place before canceling your existing coverage.

Can The Auto Insurance Company Choose Not To Renew The Policy?

An insurance company can choose not to insure a policyholder, just like a driver can choose not to be insured by the company. The insurance company will typically let the driver know by canceling their policy during the term or choosing not to renew it after the term ends. 

Companies can choose not to renew a policy for several reasons. Insurance companies may drop drivers who file many claims in a short period. Being dishonest on the application can also be grounds for cancellation.


Policy cancellation occurs when the insurance company drops a driver’s coverage at any time during the term other than the renewal time. Each state sets rules about why a company can cancel a driver’s policy. Typically cancellation happens within the first 60 days of coverage and has to be for a specific reason. Companies can still cancel a policy after 60 days, but insurance law makes the process a little more complicated.

Generally, the insurance company will cancel coverage if the driver doesn’t pay their monthly premium, if their driver’s license is revoked or suspended, or if they misrepresent themselves or their circumstances during the signup process.


Nonrenewal occurs when a company informs drivers that it won’t be offering to cover them during their next policy term. Drivers receive the nonrenewal letter when they would typically get their renewal offer. This notice indicates that the driver has 30 to 60 days to find new coverage before their existing policy expires.

Companies typically choose not to renew a driver’s policy due to policy infractions or changes in their risk profile. Policy infractions can include getting drunk driving charges during the policy term or filing too many claims in a short time. Companies can also not renew all policies in a particular area if they decide an area is too risky.

Shopping For New Auto Insurance Policies

If your auto policy is canceled or nonrenewed, your next step is to find active coverage for your vehicles before your current policy lapses. The sooner you find new coverage, the better, so you should start shopping for a new policy once you get either a nonrenewal or cancellation letter. You can call different insurance companies or pull quotes online. 

Ensure all the covered drivers’ full names, driver’s license numbers, and birthdates. You’ll also need the vehicle’s make, model, and VIN, current vehicle mileage, and your mailing address on hand for the smoothest quote process possible.

Determine How Much Coverage You Need 

Each state lists the minimum coverage amounts required to be considered insured. The policyholder can decide if they want the state minimums or a higher level of coverage. They’ll also need to determine if they need full coverage on the vehicle or just liability.

Financiers may require cars to carry a particular type of coverage, like both comprehensive and collision coverage. Check with them when deciding about the coverage you’ll need so you’ll know which coverages will fulfill their requirements. The driver should also check with their agent about their coverage limits. That way, they’re fully informed about their coverage options and can pick a level with which they’re comfortable.

Receive Quotes

The quote stage is where you choose coverages for your vehicles and see what the premium will be for each company to cover your cars. The more quotes you get, the better, but you should have at least three to compare for your best option.

For the most straightforward comparison, try to pick the same coverage for each quote. Also, keep an eye out for discounts on bundling and other opportunities to bring down the total as much as possible.

Compare Rates

Gather all of your quotes and put them in order based on either price or the rating system that is most important to you. Consider which aspect of an insurance company is the most important to you. Is it how they handle their customers? Is it whether they can pay out multiple claims at once after a natural disaster? Is it your monthly payments? Carefully consider each company and decide where they land on all 3 of those questions.

Select Your Carrier

Once you’ve compared your options, select the company that works best for you and your driving needs. Call the company and give your payment information to bind the policy and make it active.

Fill Out the Application 

Once the driver has decided which coverages they want for their vehicle, they can fill out the applications to be considered by the company of their choice. A way to narrow down the insurance companies they’ll be applying to is to do some background research first. 

Check a company’s AM Best rating or their rating with the Better Business Bureau. These scores inform potential customers about how the company handles its customer complaints. Drivers should also check the company’s JD Power rating. This score shows how financially secure the company is at any given time. 

To be considered for the policy, they’ll need to include all pertinent information, like driver’s license numbers, names, and birthdays. They’ll also need their vehicle information, like the year, make, model, current mileage, whether the car is financed, and commute mileage.

Find an auto insurance policy that meets your needs.

Get a Quote

Find an auto insurance policy that meets your needs.

Get a Quote