Majority of vehicle insurance companies offer and encourage their policyholders to auto-renew policies. They usually ask to set up an automatic renewal and keep your payment method on record to charge for the renewal premiums. That is why many policyholders may have already agreed to renewing their policy automatically once its term expires. Car insurers still send the renewal notice about 30 days before the end of the policy term with your new premium and terms. If you aren’t sure if your policy has this option or not, you should check your renewal notice as it normally states if your policy would auto-renew if you don’t do anything or it will expire at the end of its term.
So, motorists should still go over their renewal terms and insurance cards to make sure everything is in order and they are happy with the new price if they are going to let the automatic renewal process take effect. They should also make sure that their payment method is still valid because their policy may not renew if the insurer cannot take the payment. Also, some companies may require policyholders to confirm that their details are still up to date. This can be done online or by phone or post.
At times, people change their banks or the cards they have given to their carrier for payment may expire so it is important not only to make sure their vehicle insurers can take the money when it is due but also should check that the premium payment has gone through and their carrier has already sent confirmation of renewal for another term.
If you realize for whatever reason that your vehicle insurance policy hasn’t been renewed, contact your insurer immediately. Often companies may still let you renew your policy after a day or two but some companies may charge a penalty and a few other companies may offer you a new quote for a new policy. Even if you have to buy a policy from another insurer, make sure you do that as soon as possible. Also, you must stop driving until you are insured again.
Virtually every state mandates at least a minimum level of automobile insurance and therefore motorists are required to maintain coverage as long as they keep driving their vehicles. Lapse in coverage can have serious legal and financial consequences as listed below:
- If you still own your automobile but let your vehicle insurance policy expire, you would be breaking the state laws that require minimum coverage. If you get caught driving without insurance, your driver’s license and vehicle registration may be suspended, you may receive fines, your vehicle may be impounded and you may even face jail time in certain circumstances.
- If you have an accident when your policy is lapsed, you are personally liable to pay for damages and injuries you cause to third parties. You will have to pay for your own damages out of pocket as well.
- Lapse in coverage affects car insurance rates as companies increase their rates when they notice a lapse on record. A short lapse may increase your premiums a little but a longer lapse can result in significantly higher premiums.
Considering the above serious consequences having an automatic car insurance renewal in place is a very useful facility. However, it is important to acknowledge that you are free to shop around and even switch insurers if you find a better deal from another carrier. Even though everything is already arranged and your policy will renew seamlessly at the end, it doesn’t mean that you shouldn’t do anything about it.
Experts recommend motorists to shop around at least once a year as this would inform them of the latest offerings in the market and prices and potentially they wouldn’t lose out on a great deal. If you manage to find a better value policy from another vehicle insurance company, all you need to do is to set up your new policy to start before or at the same time as your current policy expires and let your current insurer know that you won’t be renewing with them.
Car insurance companies are well aware that some of their customers will leave at some stage so cancelling policy auto-renewal instructions isn’t an issue for them. Even further, if you or they somehow make a mistake and renew your policy and take the money from your account, they may cancel the policy from the start and send you a full refund once you tell them that you actually bought another policy from another company and send them a proof of coverage. But cancelling your old policy in a timely manner prevents any mix-ups.
One point to keep in mind if you are switching is that you should set your new policy to start on the last day of your current policy and not the day after because your current policy may actually expire one minute into the last day at 12:01 am. If you set up your new policy to start on the same day, it would start at 12:01, replacing your old policy seamlessly.
Automatic vehicle insurance renewal can make sure that your policy is renewed even if you totally forgot about the deadline. Nevertheless, drivers should not become overly complacent about it and should still ensure that their renewal process proceeds smoothly without any issues. Furthermore, they should always check their renewal notice to make sure they are happy with the arrangement. They should use this opportunity to go over their policy and see if they need to update anything. If so, they should update their details and ask for a requote since even small changes may change their premiums.
It is always a good idea to get a few car insurance quotes at each renewal regardless of the arrangements in place to make sure they are still getting good deals. If not, they can take this opportunity to switch insurers and save some money.