Does Car Insurance Renew Automatically?
Last Updated on October 13, 2020
Every state requires that you maintain car insurance coverage on your vehicle. With continuous coverage requirements, many people prefer automatic renewal so they are not left uninsured. Car insurance companies also prefer automatic renewal as it helps retain customers. But will your car insurance always renew automatically? It depends on your coverage, the insurance company, and what claims you may have had during the course of your last contract.
Continue reading below to learn everything you need to know about the auto insurance renewal process including:
- Why companies like auto-renewal
- Why drivers like auto-renewal
- Do all insurance companies auto-renew?
- Why your policy might not renew
- Problems with auto-renewal
Why Companies Like Auto-Renewal
Insurance companies often prefer auto-renewal. It helps them retain customers. Many people are willing to accept the new rates and terms of their auto insurance simply because they don’t have to spend time getting quotes and comparing rates. Auto-renewal allows the insurance company to set new terms and rates based on your claims and driving record, with the assumption that you’ll accept whatever they come up with. It saves them time and money.
Why Drivers Like Auto-Renewal
Drivers also prefer auto-renewal on their insurance policies. With auto-renewal, you don’t have to worry about being without coverage. Most people pay their insurance bills each month like clockwork, or they have them set up on auto-pay. You probably don’t know without looking at your insurance card or policy when it is due to expire. By having auto-renewal, you will never unknowingly drive without insurance, which can save you a lot of money and hassle if you are in an accident.
Do All Insurance Companies Auto-Renew?
Not every car insurance company will automatically renew your policy. Some insurance companies, such as the fly-by-night companies that insure otherwise uninsurable drivers, may not have auto-renew policies. If you are unsure about whether or not your insurance company uses auto-renewal, you should contact them for more information.
Why Your Policy Might Not Renew
Even if you have auto-renewal with your insurance company, you may not get your policy renewed. There are some situations in which the car insurance company may refuse to renew your policy. What’s more – you might not know that it is not going to renew until you receive a notice from the insurance company.
Non-renewal notices are usually mailed to the address your insurer has on file. Others are emailed. Either way, there’s no guarantee that you will see the notice. It is therefore always important to know when your policy might end.
Non-Renewal Due to Traffic Violations
If you get several traffic tickets in the course of your contract term, your insurance company may either raise your rates substantially or refuse to cover you at all. Most of the major car insurance companies have rules about how many traffic tickets you can have on your driving record and still qualify for insurance coverage. If you no longer meet the requirements, your insurance policy will not be renewed.
Non-Renewal Due to Accidents
You may also lose your ability to auto-renew your car insurance if you have a significant accident that you are found to be at fault for. This is especially true if you had multiple at-fault claims in a short time frame.
Your car insurance company can refuse to renew your policy if there were problems with your claim, such as a claim placed fraudulently. They can also non-renew your policy if the claim was for a significant amount.
Additionally, if you have to fight (legally) to get your car insurance to cover your claim, you will likely be told after the incident that your policy will not renew.
Problems with Auto-Renewal
There are some problems with the auto-renewal of your car insurance. If your situation has changed since the start of your last term, you may be able to get lower rates through another insurer. It usually pays to shop around for different rates, especially if you’ve had major changes like a change in household drivers, a change in the vehicle you drive, or a change in your driving record.
If your previous policy’s rates were based on items on your driving record that are now five years or older, you may be able to qualify for lower rates somewhere else. Likewise, if you have gotten additional traffic violations during this last policy term, your current insurance company may not have the best rates for you.
Every time your car insurance is renewed, the car insurance company will run a new motor vehicle report on you. Any tickets that you got through the last term that you didn’t report to your insurance company will be visible to them when they run your report, and they could make changes to your rates based on their findings. They could also refuse to continue your coverage depending on the number of tickets and the type of tickets that you received.
The Bottom Line on Auto-Renewal
Even if your insurance company uses auto-renewal, it is a good idea to be aware of when your current policy ends. Shopping around for different rates could pay off and you should be doing so within 30-days of your policy renewal. While some insurance companies let you know when your policy will renew, many people don’t get these notices. Being aware of when your coverage ends and doing your due diligence to make sure you are getting the best rates is the best option.