How early can you renew your car insurance?

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Things to know...
  • Auto insurance must be renewed every time the term is up to expire
  • Policy periods personal car insurance will last six months or one year depending on the state
  • It is the insurance company’s duty to send you a notification when your policy is about to renew
  • In most states, you must receive the notification at least 30 days prior to the policy expiration
  • If you want to renew the coverage early, you may have to set up an automatic renewal so that you don’t forget

Auto insurance isn’t one of those products that you can just buy and forget about. It’s nice to have the protection but you also can’t forget to stay up-to-date on the premiums or the protection vanishes. Insurance companies are only required to keep your premiums fixed for a specified period of time. Make sure to shop around to ensure you are getting the best rate by using our free insurance comparison tool above!

After that period of time ends, the provider can decide to raise your rates or even drop your coverage. This decision is made when a policy’s renewal is run.

As an auto insurance consumer, one of your responsibilities will be to look over all of your policy on a regular basis. One document will receive every six months to a year is your insurance renewal invoice. You can just pay the invoice but it’s better for you to understand how the entire renewal process works. Here’s what you need to know about the process and timing your payment right.

Why doesn’t your policy just remain in effect?

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It would feel like it would make the most sense for insurance companies to sell a policy and just allow it to remain in effect until the vehicle was sold. That would require a lot less administrative work and at the end of it all a lot less paperwork. Unfortunately, this is not how the auto insurance industry works.

Calculating premiums for a specific vehicle being driven by a specific group of drivers is a lot more involved. It’s the insurance company’s job to consider loads of information when setting premiums.

The information that is considered isn’t just referencing the car’s history and the driver’s history now, but also their history in the future.

What is an insurance risk class?

This information is used so that the company can place the client in a risk class. Risk classes are used to help the company decide what a fair premium might be for the driver at the current time.

When a quote is offered the premiums will remain level for the rest of the term as long as the information provided is accurate.

The insurer cannot raise your rates during the term, that’s against the rules. The only time the rates can be raised and the factors surrounding risk class can be reassessed is when the policy is set to renew. Renewals will take place right around the time that your insurance card says that the policy will expire.

When will your rates go up?

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It’s nice to know that you’re going to be paying that low rate that you were quoted for the next year. What can be concerning is that the insurance company is free to raise your rates as they please after that date is up. No one wants to be stuck shopping for insurance each and every time it renews.

It’s up to you to learn why policy premiums often rise. In some cases, the rates will rise just simply because there have been a lot of claims filed in the state and the company has filed a statewide increase. Other times, a reason behind the rate hike has to do with you. Here are some of the reasons that you might pay more once your term is up:

  • You have been convicted of minor violations and have chosen not to complete traffic school
  • You have been found guilty of a major violation like DUI or reckless driving
  • You had an at-fault accident in the prior term
  • You have lost your good driver and accident-free driving discounts because of tickets or accidents
  • You’ve lost good student and driver’s training discounts
  • Your mileage and usage information has changed

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When will you find out if your rates have gone up?

It’s nice to have a whole term to prepare for increasing rates if you’ve had a ticket or an accident. With that being said, it’s scary to wonder how much more you’re going to have to pay for the coverage that you already have. If your rates are going to go up, you’ll find out at your next renewal.

Every company has a different policy when it comes to how and when renewals are processed. It’s pretty standard for a company to run a renewal around 45 days before the policy expires. Some companies prepare a bit earlier and leave around a 60-day window. This gives the company time to run motor vehicle reports, claims record checks, and other reports to ensure the customers being rated properly.

Can you pay your renewal early?

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Just because your renewal has been run doesn’t mean that you will find out your rate right away. Most of the time the state gives the company up until about 30 days before your renewal to send you the full packet that details your new premium. You may be able to get it earlier, there are no guarantees.

It’s best that you call your agent and let them know why you would like to pay your premiums for the next term. The agent may be able to call the underwriting office and see if all of the reports that need to be run have been done. If the renewal is already pending in the system, you may be able to pay. If it hasn’t been completed, have to wait until it is.

Is there any way to ensure you don’t miss the renewal?

If your main reason for wanting to pay your renewal early is that you don’t want to miss it, a solution would be to look for a company that offers the automatic renewal option. When you select this, the new payment is deducted automatically from your account so there will never be a lapse if you miss the renewal payment.

Auto insurance can get complicated if you don’t understand how the dealings work behind the scenes. You might not want to shop around every renewal, but it is best that you look around at least once every year or so. Find the best rates by comparison shopping online, and you may not even want to renew your current policy.

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