When does my auto insurance renew? (2024)

If you’re wondering when your auto insurance renews and how the auto insurance renewal process works, we’re here to help. Standard car insurance policies only last 6 months or 12 months at a time. During this time, premiums remain the same until the term passes unless you change drivers, vehicles, locations, or coverages.

It’s not until the policy is set for renewal that the premiums can change for the better or the worse. Before renewing car insurance with Progressive, Allstate, Geico, or any provider, compare car insurance quotes from the best auto insurance companies.

Read on to learn about car insurance renewals, when they get processed, and what happens as your renewal approaches.

Find Out When Your Auto Insurance Policy Renews

Car insurance policies renew after every term. Once the 6-month or 12-month term you carry ends, the policy must actually renew for your coverage to remain in effect.

Does your car insurance renew automatically? Yes, in most cases, your auto insurance policy renews automatically. The larger auto insurers like Geico, Allstate, and Progressive all renew automatically.

Read More:

• Geico Auto Insurance Review
• Allstate Auto Insurance Review
• Progressive Auto Insurance Review

In most cases, your auto insurance policy renews automatically, and if you buy new coverage you will need to remember to cancel your old auto insurance policy before it renews and you end up paying for two auto insurance policies.

While your first term isn’t a renewal, every term that you stay with an insurer after the initial term will be considered a renewal because it’s when a policy is reassessed for risk. Typically, the state department of insurance has rules regarding how much advance notice you must be given before the rate changes.

If the company decides that the household is still an acceptable risk, new documents will be sent out and the policyholder will have the option to continue the coverage or to shop around for better rates elsewhere.

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Why Rates Change After an Auto Insurance Renewal

There are several different reasons why your rates can go up or down when the policy renews. When you buy coverage, your premiums must stay level for the entire term after the policy has been underwritten, but that doesn’t mean they’ll stay level for life.

At some point, the insurer is free to reassess the risk and adjust the premiums when necessary. This happens when the term ends and the policy renews.

It’s important to budget for your insurance costs every year so that you can maintain continuous coverage without any lapses or surprises when you receive your auto insurance renewal reminder letter.

Since there’s a possibility that your insurance expenses could involuntarily go up at your renewal, you might be interested in learning when you should expect to get a notice in the mail.

Most Common Reasons for Rates to Go Up at Renewal

Insurance rates will be different at renewal because the policy is underwritten to assess new risk ratings.

All too often, consumers receive their auto insurance bills to find that their rates have gone up even when there’s been no real change to the policy itself. For loyal consumers who’ve stayed with an insurer for years, a 25% increase can feel like a slap in the face.

Here are some reasons a company might increase your renewal rate:

• The company has filed a higher gross rate through the department and it has taken effect.
• Your motor vehicle report has new driving convictions reported.
• You’ve filed a claim that’s considered a chargeable loss.
• You haven’t responded to a request for your odometer reading and current annual mileage.
• The insurer has discovered a new household member and has rated them as a covered driver.
• You’ve lost a good driver discount because of chargeable loss or multiple violations.
• You’ve failed to provide proof to renew discounts for mature driver training or good student discounts.
• You haven’t signed a waiver for medical payments or uninsured motorist and it’s been added to the policy.

Many experts say that being a loyal customer in the insurance market can cost you.

Most Common Reasons for Rate Decreases at Renewal

While it’s not common, rate decreases at the time of renewal are possible. Here are some changes that can lead to rate decreases:

• You’re a young driver and your driving experience qualifies you for good driver discounts.
• You have a conviction on your record that’s fallen off after 36 months.
• You have an at-fault accident that’s fallen off of your insurance record.
• Your new clean record qualifies you for good driver discounts.
• You’re eligible for a new loyalty discount.
• Your child earns good grades and received the good student auto insurance discount.
• You provide an odometer reading and you’re in a low mileage class.

More often than not, the rate change is because of something that’s changed in your favor and not because the company has lowered its base rates.

When You’ll Receive Notice for Your Insurance Renewal

You want to be sure that you have enough time to review your renewal notice so that you can shop the market to look for lower rates. It’s also important that you review the details and rating factors for errors that could save you money.

Most states have an auto insurance renewal grace period which will allow you to renew expired auto insurance online in many cases. Some companies offer their customers the option to automatically renew if they’re set up for automatic payments.

Read More: What You Should Do If Your Auto Insurance Expired Yesterday

What Underwriters Look at When They Process Renewals

Processing a renewal is a lot like underwriting a new policy application. Since everything is reassessed, the professionals will run all of the same reports they run when they’re issuing a policy.

Here are some of the things they might do:

• Run drivers’ motor vehicle reports
• Run the claims underwriting exchange report
• Discount eligibility evaluated
• Usage, mileage, and vehicle ratings reassessed

If you’re about to receive your renewal, it’s important that you are prepared to shop the market. Taking the information on your renewal and getting multiple rate quotes is an efficient way to keep your auto insurance premiums low.

If you want to save time on your mission to find affordable coverage, use an online comparison shopping tool and you can see what each competitor in the market charges instantly.

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Automatic Renewals for Car Insurance Coverage

In the interest of eliminating as much uninsured driving as possible, an increasing number of insurance companies offer continuous coverage that renews automatically unless the policy is canceled.

Usually, insurance companies will automatically renew the policies of those customers who pay using debit accounts or certain credit cards.

However, unless the insurance company specifically states that the policy will be automatically renewed, customers shouldn’t assume that because they’ve received a renewal notice, their insurance coverage will continue.

They should contact the company not only to ensure they have continuing coverage but also to report all incorrect policy information and any necessary changes needed for adequate coverage.

Continuous Renewals Benefit the Companies

Customers should understand that accepting the automatic renewal process could result in numerous drivers having higher costs rather than the lowest cost auto insurance company. Be sure to shop around and compare rates from top providers if you get an auto insurance renewal increase.

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While automatic renewal offers convenience because it eliminates the possibility of lapsing policies and dealing with the hassle of reviewing and signing contracts, automatic renewals remove the customer’s incentive to shop around and possibly find a better deal somewhere else.

Automatic renewals are actually favorable for insurance companies as well because if the customer doesn’t shop around and the policy is simply renewed, the insurance companies retain their business, and all the profits from the rate increase too.

Learn More: How to Evaluate Auto Insurance Quotes

Therefore, it’s always to the customer’s advantage to thoroughly review their renewal policies because all insurance companies’ rates and coverage change.

Streamlining Auto Insurance Renewals for Informed Coverage Decisions

In actuality, it’s not important to renew an auto insurance policy prior to expiration. Most policies remain in effect for 6- or 12-month periods and customers often don’t have time to consider renewing before then.

So, it’s critical for auto insurance policyholders to be mindful of their policy’s expiration date to allow time for research. Insurance companies are always striving to attract new business, offering a multitude of auto insurance discounts and promotions to prospective customers.

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