Car insurance renewal is typically a straightforward process. In fact, in most cases, it\u2019ll happen automatically. When your policy is close to expiring, your insurer will send you an updated rate. If you\u2019re enrolled in automatic payments, your insurer will charge that amount to your account and you\u2019ll maintain your coverage.<\/p>
However, if your rate has gone up, your coverage needs have changed or you\u2019re looking for savings, you should consider your options.<\/p>
A car insurance premium is the cost of your auto insurance policy and is sometimes called an insurance rate. Your total premium amount may cover you for six months or a year, depending on the policy length options your company offers, but you can typically pay your premium quarterly or monthly rather than as a lump sum.<\/p>
The national average premium for a full coverage car insurance policy in 2023 is $2,014 per year, according to Bankrate\u2019s study of average rates from Quadrant Information Services. The minimum coverage average is $622 per year.<\/p>
An insurance premium is what keeps your policy in force. As long as you continue paying the auto insurance premiums on time and meet the terms of your policy, your insurance company ensures financial protection for you and your vehicle in the event of a covered loss. If you stop paying the premium, the insurer has the right to cancel your policy after a certain period.<\/p>
Once your car insurance company cancels your policy, your coverage terminates, which may leave you with a lapse of coverage if you don\u2019t secure other coverage beforehand.<\/p>
How often do you pay for car insurance? It depends. When it comes to payment plans, your company probably has several options. You can usually pay your premium in full or in installments, usually monthly, quarterly or semi-annual, depending on the length of the policy term. You typically get the best rate on insurance when you pay in full and avoid installment and processing fees.<\/p>
There are a few things you might want to consider before choosing a payment plan. Although you may save money by paying your premium in full, you may want to consider installments if this lump sum will cause you financial hardship.<\/p>
Most companies will allow you to change your payment plan in the middle of your policy term, too. Perhaps you\u2019d like to start your policy on a monthly payment plan, but later on, find that paying in full makes more sense. If you have specific questions regarding your payment plan options, you may find it helpful to contact your insurance agent.<\/p>
Auto insurance policy periods are usually about six or 12 months. Once you near the end of your current policy term, you\u2019ll receive an email or a letter from your insurer that will include the terms it will offer you to renew your policy. Some specifics around your coverage may change, and your car insurance rate will likely increase. Your rate or other terms may change, so look over your new ID cards and read the new policy documents before the renewal date.<\/p>
Once you receive that information, you\u2019ll have two options: Renew your current policy with the updated rate or shop for a new one.<\/p>
Chances are you won\u2019t need to take any action to renew your policy. With most providers, car insurance automatically renews. If you\u2019re happy with your current insurer and want to stick with it, all you\u2019ll need to do is review your updated rate and meet the deadline for your first payment under the new policy. If you\u2019re already enrolled in automatic payments, you\u2019re good to go.<\/p>
But if you\u2019d like to ensure you\u2019re getting the best deal for your coverage, shop around and compare quotes from other companies before you commit to your current insurer\u2019s new rate.<\/p>
If you decide not to renew your policy, you\u2019ll need to shop for new car insurance online or with the help of an agent or broker. When you\u2019re researching, think about how much auto insurance you need.<\/p>
To give yourself thorough car insurance coverage that protects your car and your wallet, consider buying a full-coverage policy if you own a newer car. Full-coverage auto insurance policies usually include these:<\/p>
Liability coverage (or third-party car insurance) is required in most states. Some states also require underinsured\/uninsured motorist coverage, personal injury protection (PIP insurance) or medical payments coverage (MedPay). <\/p>
If your car policy expires, you might still be able to renew it. Do this as soon as possible, because a lapse in coverage can cause you to have increased rates once you\u2019re insured again.<\/p>
If you get into a car accident while your coverage is lapsed and you injure someone or damage property, you\u2019ll have to pay any expenses out of pocket. The same applies if your car is damaged by a natural calamity like a flood or another situation out of your control. Your insurance company might be willing to reinstate your policy after you let your coverage lapse, but you\u2019ll likely be charged a penalty. If you can\u2019t renew, buy a new policy.<\/p>
A lapse in auto insurance can also cost you when you decide to get a new policy. If insurers see a lapse on your record, they\u2019ll almost certainly offer you a higher quote when you shop for a new car insurance policy. That\u2019s because insurers see drivers with an insurance lapse as riskier to insure.<\/p>
An auto insurance company can cancel or refuse to renew your policy as a consequence of things like driving record issues or missed insurance payments.<\/p>
Here is the difference between a policy cancellation and nonrenewal.<\/p>
Cancellation can put an end to your current insurance policy at any time. But after 60 days have passed since the start of your policy, your auto insurance provider cannot end your coverage for just any reason. Your policy could be canceled if:<\/p>
If you cancel your car insurance, you\u2019ll usually get a prorated refund for any time you\u2019ve paid ahead. But depending on your provider, you should be prepared for a short-rate cancellation. This type of cancellation discourages a customer from ending their policy before the expiration date because it entitles the insurance company to keep a greater percentage of the unearned premium amount.<\/p>
Nonrenewal happens when your insurer decides against renewing your policy at the end of the coverage term. The company has to give advance notice and explain why it is not renewing. A nonrenewal can occur if:<\/p>
If you\u2019ve missed payments, the company may only have to give you 10 to 20 days\u2019 notice for nonrenewal. For circumstances out of your control, you\u2019ll typically get at least 30 days\u2019 notice. The amount of time required for notice of nonrenewal varies by state.<\/p>
To opt out of renewing your car insurance policy, follow these steps:<\/p>
Though you can switch car insurance companies at any point, the policy renewal period can be a good time to do it. Here are some reasons to consider getting car insurance from a different provider:<\/p>
Before switching, check with your insurer to see what it can do for you. If the company doesn\u2019t offer good enough coverage or rates, find another provider that\u2019s willing to work with you.<\/p>
Your premium is determined by factors like the type of car you drive and the types of coverage you have. Premiums tend to increase if you\u2019ve been involved in a car accident or gotten several traffic violations. Your rate may also go up if you\u2019ve done any of the following:<\/p>
While you can pay your full premium every six or 12 months, some insurers offer monthly payment plans. With increasing insurance premiums, you\u2019ll benefit most if you pay yours all upfront. Installment plans create more work for insurance companies, so some reward you with a discount when you pay off your premium all at once. This could eliminate administrative fees and surcharges on your bill.<\/p>
Even if you have a great driving record and haven\u2019t made any changes to your policy, your rate could increase when you renew. This might be a great time to get quotes from other insurance carriers. But if you\u2019re happy with the rate, just keep paying your insurance premium on time and in full through your credit card, debit card or other form of payment.<\/p>