When you purchase car insurance, you are purchasing a policy that provides you with protection for a set period of time. The majority of car insurance policies are for six months or a year. You’ll have to buy a new one after that because driving without car insurance is illegal and the fines are high. For example, in Alberta, Canada, the fines for first and second offenses are $10,000 and $20,000.
So, once your policy expires, you have to renew it. When it comes time to renew your car insurance, you can select the types of coverage you need such as collision or comprehensive coverage. When your policy is about to expire, your insurance company will send you a letter or an email. The company may then automatically renew the policy, or ask you to show proof that your basic information hasn’t changed and then renew it.
If you let your current policy lapse, you may have difficulty obtaining a new one. This is known as nonrenewal, which means that your insurance company will not provide you with a new policy. A lapse in coverage may also result in higher premiums.
The following tips will help you understand the renewal process much better.
Work with an insurance broker
An insurance broker acts as a liaison between the insurance companies and the clients. So, if you didn’t consult with an insurance broker previously, you should now, especially if you decide to change the policy. If you are considering purchasing a new insurance policy but are unfamiliar with its complexities, consulting with an insurance broker may be a good idea.
When you find a policy, insurers should highlight the key facts, and your broker should explain them to you to make sure you understand what the company is proposing for you to buy. So, before you decide anything, find an insurance broker to consult with, and then decide on the type of insurance policy you want to purchase.
For example, if you live in Edmonton, Canada, it is a good idea to research the local market and find quality insurance brokers in Edmonton to get in contact with. Working with a broker is useful because they will give you unbiased, objective advice on the coverage that is best for your needs and fits your budget. Finding a broker in the area where you live is important, as they are familiar with all state laws.
Understand the renewal process
Even though you work with a broker, you still need to understand the process of renewal. Every insurance company has its rules. In some cases, an insurer will simply send you the renewal documents, and your policy will be renewed automatically on the corresponding date. This is common with monthly-pay auto insurance policies. If you have no problems with your updated policy or the change in premiums, you are not required to do anything.
Your policy will automatically renew without your intervention, and your insurer will continue to deduct your monthly insurance premium directly from your account. If you have a problem with your policy and do not want to renew it, you can cancel it and ask for another offer or find another insurance company.
Learn how to change your current car insurance policy
If your car insurance is about to expire and you don’t want to keep your current coverage, you can notify your insurance company that you want to change it. Then, purchase a new policy that begins before your current one expires.
If you don’t want to renew your car insurance policy, you can simply cancel it. The insurance company will have a say in this situation. Some companies will let you cancel your policy over the phone, while others will require a letter stating your intention to cancel.
Check the increase in the insurance premium rates
Insurance companies may occasionally raise the rates to reflect the current economic situation or the changes in government-mandated insurance regulations. Most often a rise in your auto insurance premium is associated with a poor driving record, a prior claim, or adding a new driver or another car to your policy.
Even changing jobs can raise your premiums, if it increases the distance you travel to work. Whatever the cause of the increase, understand how to calculate the premiums and check each piece of information in detail.
Final thoughts
A valid car insurance policy is a must. Make sure you consult an insurance broker to discuss your options, but above all, understand the renewal process yourself. Learn the insurance procedure, so you can complete the process quickly.