Car insurance renewal is an annual deal for most drivers in Ontario. If your car insurance policy is up for renewal, there are some important things to know about the process.
For one thing, standard auto insurance policies have a one-year term. As your renewal date approaches, you can expect a letter from your current insurer with an updated rate and documentation. You should also receive a new motor vehicle certificate of insurance.
Once you receive this package, it’s up to you whether or not to accept the new rate offered by your insurance company or switch to another company offering better rates (just make sure that if you decide on the latter option before the policy expires). Your previous provider will automatically renew it for another year unless they’re notified otherwise before its expiration date.
Car insurance renewal is a great way for drivers to save money and reassess their driving habits. This has been especially true in the age of COVID 19. If you’ve been working from home, you can save a decent amount of money on your car insurance renewal.
Below we’ve outlined how to renew your insurance, things to consider, and commonly asked questions.
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How does car insurance renewal work?
In Canada, standard car insurance policies have a one-year term. As your renewal period comes up you’ll receive information from your insurance company about your renewal date, updated rate, policy documents, and your new car insurance certificate.
Depending on your driving record, there are a couple of different things that can happen when you receive the notice:
- Your rates stay the same
- Your rates increase
- Your rates decrease
- Your insurance gets cancelled by your provider
If you’re unhappy with your current provider, you have the option of switching providers.
How do you renew your car insurance policy?
If you decided to wait for the renewal package in the mail, the renewal process goes like this:
- You’ll receive a notice in the mail 30-60 days before your renewal date
- Review the new terms and premiums, if you don’t like them now is the time to start shopping around for a new insurance company
- If everything looks good you’ll automatically renew
- You can either pay for the year in advance or continue with monthly payments
Factors to consider before renewing your policy
- How far is your commute? Has it changed in the past year?
- Do you have winter tires?
- Do you use your car for business?
- Have you added any modifications to your vehicle? (ie. stereo, aftermarket accessories)
- Who drives your vehicle? Do you need to add or remove an occasional driver?
- Have you added any anti-theft devices to your vehicle?
Why did my insurance go up at renewal?
If you’re wondering why your car insurance premium increased over the last year, there are a number of factors that could have caused it. The Insurance Bureau of Canada states that each province sets its own premiums based on industry research and actuarial studies done by an actuary. Your insurer will also factor in other changes such as:
- driver safety record (based on past accidents)
- adding a new driver
- the severity of loss history for claims filed against this policy
- driving habits/miles driven per day or week
- increasing coverage limits
For example, if you don’t drive much and haven’t had any major traffic violations lately, your rate might stay fairly flat from one term to the next. If you’ve been in a car accident within the last year, you can expect your premiums to go up in order to compensate for higher risk.
Similarly, if there was an increase in other drivers requesting insurance because they couldn’t afford their own policy due to high prices or unemployment rates (or both), this would also trigger increased premiums across the board.
The bottom line is that understanding how car insurance works will help ensure you’re getting the best deal possible – and no surprises when it comes time to renew!
Does car insurance renew automatically?
Your car insurance policy will automatically renew on the day it expires. This means if you don’t take any action, your insurer will extend your coverage for another year and charge you accordingly. You’ll typically receive a renewal package about 30-60 days before the expiration date of your current policy.
The same company that handles physical damage to your vehicle also handles liability issues arising from accidents with other cars or property – this is known as comprehensive car insurance. If there are no changes in driving habits over the past 12 months, chances are they won’t make any adjustments at all; but sometimes even small increases can be made due to changes in the policy.
This process only applies if you have not notified them that you do not want to renew by the end of your policy term. If you have, they won’t automatically renew it for another year and you will not be charged for cancellation.
Can you switch insurance companies before renewal?
Yes, you have the option of switching car insurance companies at any time – not just when your auto insurance policy is up for renewal. You can also switch companies if you’re dissatisfied with the premium, coverage, or service.
If your current auto insurance policy is coming up for renewal and you want to compare prices on other providers’ policies before committing to a new term, it’s best not to renew at this time. Your insurer will automatically renew your policy as soon as it expires unless they receive written notice from you saying that you don’t want them to do so. You have until the day of your renewal date (plus one year) in order to change car insurance providers without penalty – after that point, any cancellation fees become more costly because they are calculated based on months remaining in the contract period.
What happens if I renew my car insurance after it expires?
You can renew your insurance after the expiry date, but it’s hard because you will have to pay a fee as there might be a gap between when the old insurance ran out and when the new one started.
Make sure to pay your renewal on time if you want to avoid any potential issues. Failing to make your payment by the due date causes your insurance to be suspended or canceled and may result in driving without any insurance.
Can an insurance company not renew my policy?
If you have any change in your driving record or history, your insurance may be canceled. If you have been involved in an at-fault accident, a major traffic violation, too many claims filed, or payment issues; it will likely not be renewed.
If this happens, consider high-risk auto insurance.
Insurance companies are required to renew your auto policy if you request it.
– If the company is insolvent or bankrupt and cannot pay its obligations in full with a reasonable degree of certainty within one year; or
– The Minister provides an order for liquidation under section 246(n) that applies to all policies issued by the insurer (in other words, they’re not just shuttering specific product lines).
If either of these two conditions exists when you want to cancel your car insurance policy with them: contact the Insurance Bureau of Canada at their website about what steps you should take next. They will help make sure that any outstanding claims are settled properly so there’s no financial impact on you as well.
Can I renew my car insurance for 6 months?
Car insurance renewals are for one year. Some companies offer policies for six months. Contact your insurer to find out more about short-term or temporary insurance plans.
What's the earliest you can renew your car insurance?
Your insurance company will send you a notice before your policy is about to expire. Typically, it’s safe to renew your policy 30-45 days prior to expiration.
What is the car insurance renewal notice period?
Insurance companies will mail you a notice before your insurance contract expires. Generally, insurers will send this notice 30 days or more in advance of the expiration date. During this period, it is advisable to review your options and decide whether to renew with your current insurer or switch providers.
