Looking to renew your car insurance policy but aren’t sure how? BrokerLink is here to help. Learn about renewing car insurance, including what information you need to renew it, how automatic renewals work, whether you need to renew, and a few of the most common reasons that car insurance rates go up upon renewal.
Understanding car insurance renewal
Car insurance policies have specific rules, known as policy terms, and these terms include a policy end date. Most policies last for one year from the start date. When this year is over, your current car insurance policy needs to be renewed. Otherwise, it expires and becomes invalid. Driving without a valid policy is illegal across Canada. If you’re caught driving without insurance, you could face big fines, jail time, and lose your driver’s licence. When it’s time to renew car insurance, four things can happen. The insurance company can:
- Keep your rate the same
- Increase your rate
- Decrease your rate
- Decide not to renew your policy
Steps to renew your car insurance policy
Most insurance companies will automatically renew your policy if you have a good driving record and pay on time. Your insurance company will send you the details of your new policy for the next term before the expiry date listed on your policy, usually one to two months before your renewal date, known as your renewal period. This information, which includes your premium (the amount you pay), can be sent by mail or email. Here’s what to do with next:
1. Review your new policy
After you get your notice, the first thing to do is review your policy completely. Focus on what your policy covers, the amount you’ll pay for your deductible, and whether your premium has increased, decreased, or stayed the same. Also, make sure your name, address, and contact details are correct.
2. Assess your coverage needs
Next, assess your current situation and coverage needs. Maybe you’re driving less, or you need to add your newly licenced teenager to your policy. This is also a good time to consider whether you’d like to add extra coverage to your policy, like roadside assistance or rental car coverage.
3. Renew or change your policy
After considering these factors, you have two options: renew with your current provider or switch to a new provider.
You may decide to renew with your current insurer if you are okay with the new policy details. If your insurance company offers automatic renewals, you don’t need to do anything, and you’ll keep paying on your current payment schedule. If your policy doesn’t renew automatically, check your renewal options and instructions to avoid any gaps in coverage. You may be able to renew online, or you might need to contact your provider directly.
If you’re not happy with the terms in your renewal notice, you can change to a new provider. Start by comparing quotes from different insurance providers to find the best rates and car insurance options. If you find a better policy with a new provider, contact them to give the necessary information to set up your policy in time. Also, don’t forget to let your current insurance company know you won’t be renewing with them.
4. Receive your new insurance pink slip
Once you’ve renewed your car insurance and paid your premium, your insurance company will give you a new insurance pink slip as proof of your renewed coverage. Be sure to swap out your old one with your new one. This document confirms your car is insured and includes details like the policy number, start and end dates, the insured vehicle, and the names of any insured drivers.
Also, make sure you always have your pink slip on hand while driving. It is mandatory, and you will need it if you get into an accident or are pulled over by law enforcement.
What do you need to provide for car insurance renewal
If you wish to renew your auto insurance policy, you must be prepared to provide the following information (make sure to notify your provider of any changes to your address, vehicle type, or vehicle usage):
- Mailing address
- Contact information (phone number and email address)
- Vehicle usage (how frequently you use your vehicle and what for)
- Vehicle modifications (both physical and internal)
- New drivers (i.e. if anyone new has started driving your vehicle regularly)
- Traffic tickets (you must inform your provider of any traffic convictions, licence suspensions, or accidents that occurred in the past year)
Why you must always review automatic renewal policies
While automatic renewals are easy, they might cost you more money, especially if your rate goes up. A lot can change in a year, and that can affect your rates. For example, you might qualify for a new discount, or your driving habits might have changed, which could give you a lower rate than your current provider offers. You may also no longer need to carry certain coverage, like comprehensive coverage, if your car is older.
That’s why, when your policy is up for renewal, you should absolutely review your new policy details and contact your insurance provider to update them on any changes. We also strongly suggest contacting a local insurance broker like BrokerLink, who can compare car insurance rates from top insurance companies to make sure you’re getting the best deal available.
Is it time to renew your car insurance policy? Trust BrokerLink to find the best coverage options for you. Contact us today to simplify your policy renewal process!
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Do you need to renew your car insurance policy?
No, you do not have to renew your current car insurance policy with your provider. However, you must have a valid car insurance policy before driving.
If you don’t like the new terms from your insurer, you need to get new coverage with a different insurance provider before your current policy expires. Having a gap in coverage on your insurance history can cause problems, like making it harder to get car insurance later. Plus, you cannot drive without a valid policy. These are why it’s essential to get a new policy before your old one expires.
Questions to ask yourself before renewing car insurance
Before renewing your policy, ask yourself a few questions. The answers to the questions below could have an impact on your insurance rates. Whether they serve to increase or decrease your rates, it’s important to speak with an insurance broker to understand what factors influence insurance costs and what you can do to keep your costs as low as possible. Consider these questions before renewing your policy:
- Do I commute to work? How far do I drive each day? Has the amount that I drive each day changed over the past year?
- Do I use my car for business?
- Who drives my vehicle? Do I need to remove or add any occasional or secondary drivers?
- Have my insurance needs changed? Would increasing or decreasing my limits or adding new coverage make sense?
- Do I use snow tires over the winter?
- Have I added any upgrades to my vehicle (e.g. tint, aftermarket accessories)?
- Did I recently add any vehicle security features, such as an anti-theft device?
Can I change my auto insurance policy before the renewal date?
Yes, you can change your auto insurance policy before the renewal date, but there might be consequences. Depending on your current policy, cancelling your plan early could lead to penalties or administrative fees.
Depending on the savings from a new policy, it might be worth waiting until your current policy ends. Waiting until the policy renewal date is usually the easiest option, as you won’t face penalties and can simply inform your current company that you won’t renew your insurance. Then, you can get a new policy from a different provider.
If you’re unsure whether to stay with your current provider, reach out to the insurance team at BrokerLink. We can compare rates for you to ensure you get the best coverage at the lowest rate.
Why your auto insurance rate may increase upon renewal
As mentioned earlier, one of the possible outcomes around renewal time is that your insurance provider can increase your rates. If this happened to you, you may be wondering why. A few of the most common reasons for increased car insurance rates are as follows:
Traffic tickets
In the eyes of an insurance company, traffic tickets (also known as speeding tickets) increase your odds of getting into a collision. So, if you racked up new traffic tickets in the last year, your insurance premium may increase because of it.
At-fault accidents
Similar to the logic behind traffic tickets, getting into an at-fault accident can cause your insurance rate to go up. Generally speaking, the poorer your driving record (i.e., the more accidents, tickets, or incidents you’re involved in), the more you will pay for car insurance.
New drivers or cars
If you add a new car to your policy or replace an existing car with a new one, your insurance rate may go up, especially if your new vehicle is more expensive to replace or repair than your last vehicle.
Similarly, adding new drivers to your policy can also increase your premium, especially if the driver is newly licenced and/or under the age of 25 years old. Each driver’s premium is partially dependent on the years they have been licenced and their driving experience, which is why younger drivers with limited experience tend to have the highest premiums.
High insurance claims in your neighbourhood
Another reason your auto insurance rate may have increased upon renewal is if there were an increase in insurance claims in your neighbourhood. Where you live is one factor that influences insurance rates. If there were changes to trends in your neighbourhood, such as more incidents of theft or vandalism, accidents, or weather-related claims, your insurance policy may go up in price.
Loss of insurance discounts
There are all kinds of car insurance discounts available to drivers, from safe driver discounts to winter tire discounts. Changes in circumstances might make you ineligible for said discounts, which could increase your rate. For example, if you maintained a clean driving record and earned the safe driver discount but then got into an accident, you may no longer qualify for this discount, which likely means your new policy would be more expensive.
Adding new insurance coverage
One final reason that your car insurance rates may increase upon renewal is if you add new insurance coverage or up your limits. The insurance coverage you select has a major impact on how much auto insurance costs. So, if you previously only purchased the minimum coverage requirements but later decided to add optional coverage, like collision, comprehensive, or accident forgiveness, your rates will likely increase. The same will happen if you increase your limits on existing coverage, such as raising your third-party liability from $200,000 (the minimum amount in many provinces) to $1,000,000 or $2,000,000.
Please note that it’s possible for an insurance company to increase your premiums even if you have no claims, tickets, or at-fault accidents. The reality is that there are several factors outside of a driver’s control that can cause their insurance rates to go up, such as:
- Changes to underwriting rules or regulations
- Increased costs of parts or claims for the vehicle you drive
- Change in credit score (this varies based on the province you’re in)
Why did my insurance provider cancel my auto insurance policy?
If you get a notice saying your insurance company is cancelling your policy instead of renewing it, it might be due to changes in your driving record. For example, if you caused an accident or were convicted of a serious traffic violation like a DUI, the insurance company might cancel your policy. Filing too many claims or having payment issues, like paying late or not paying at all, can also lead to cancellation.
If your policy is cancelled, it may be harder to get car insurance as future insurance companies may see you as high-risk. If so, you may only qualify for high-risk auto insurance. You can talk to an experienced brokerage, like BrokerLink, to understand how high-risk insurance works and what it means for you.
Contact BrokerLink to learn more about car insurance renewal
Do you still have questions about renewing your car insurance? BrokerLink can help. We have been helping Canadians find quality car insurance policies since 1991, which means we know the ins and outs of the insurance industry. Whether you want our advice on whether to renew your current policy or find a new one or if you need help deciding between coverage options, give us a call.
We can also be reached online or in person at any BrokerLink location in Canada. Drivers can also take advantage of our online quote tool and receive a free auto insurance quote in minutes. Contact BrokerLink to learn more about car insurance renewal and to help you save money today.
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