Why Insurance Providers Prefer Automatic Renewal
When a driver’s policy is set to expire, insurance providers hope that the customer stays on to sign another contract. Having an automatic renewal process, to the delight or dismay of customers, helps the provider retain more customers. If a contract expires without automatic renewal, the customer has the opportunity to look for other coverage at potentially better rates. With automatic renewal, insurance providers don’t have to worry as much about losing those customers every time their contract is up.
Also, automatic renewal allows providers to set the new contract’s rates themselves rather than having to negotiate with the customer. After the provider automatically renews the contract, customers often accept the new rates as they are, which saves providers time and money.
Many drivers don’t realize their car insurance plan automatically renews every year, six months, or however long their contract is.
Benefits and Drawbacks for Drivers
Automatic renewal can aggravate some drivers because they wanted to get out of the contract when it was up but didn’t realize it was about to expire. However, other customers prefer automatic renewal because it saves them the hassle of having to worry about finding a new plan, comparing rates, or haggling for a new price. Also, automatic renewal prevents drivers from unknowingly being without insurance for any length of time, which can cause significant trouble if they are in an accident.
Does car insurance automatically renew without any notice? The insurance provider often sends out notification to a customer letting him know his policy is about to expire, usually about 30 days before the renewal date. This, in the mind of the provider, is enough time for the customer to research other options, if desired. However, customers do not always receive these notices, so the notifications don’t always alleviate customers’ issues with the process.
If you’re unsure about your policy’s automatic renewal process, or want to compare coverage details and rates, give us a call today.