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Laura Berry

Former Insurance Agent

Former Insurance Agent

Joshua Adamson

Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.

UPDATED: Dec 11, 2023

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Does Car Insurance Automatically Renew?

Many drivers don't realize their car insurance plan automatically renews every year, six months, or however long their contract is. Both insurers and drivers can benefit from automatic renewal, but not all drivers may want to be tied to another contract with that provider simply because the company automatically renewed it.  Of course, keep in mind, you can cancel your auto insurance at any time. There are rules for how much you'll get back, and generally, auto insurance companies will ask if you've secured another policy. It's also cheaper in many cases to keep the same insurance company for awhile. You get loyalty discounts, and if you do have to switch, that loyalty will count for you.

Why Do 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. It also helps customers who might have other things on their mind to maintain auto insurance with little to no effort. Each time, assuming the insured hasn’t accrued any more marks on their record, has continued payments, etc., the insurance premium may even go down.

If a contract expires without automatic renewal, the customer has the opportunity to look for other coverage at potentially better rates. They’re also more likely to make the effort. 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. They just depend on the automatic renewals from an auto insurance provider to be charged automatically to the card they designate.

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What Are The 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.

The most important thing to remember if you’re concerned about this is you can cancel any time in your policy period. This could be because you lose your license or sell your car. In either of these events, it’s better to maintain your insurance to keep your rates as low as possible later on and insure you if you drive another car. You can also cancel if you’re switching to another carrier with minimal hassle. Some companies may offer you discounts to keep you on board, but they can’t force you to stay.

If you’re unsure about your policy’s automatic renewal process, or want to compare coverage details and rates, give us a call today. If you’re considering moving away from your current policy, talk to an insurance agent and see what your options are. You can get free quotes at any time or talk to auto insurers to see if they can offer you a better price.

With many online calculators and insurance agents readily available, quotes take minutes. Proof of insurance can be just as quick. It’s easier than ever before even if you don’t have a previous policy.

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