Expired Car Insurance Renewal

10 minute read Published on Dec 16, 2022 by BrokerLink Communications

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Was your car insurance policy recently up for renewal and you let it expire? Fear not because BrokerLink can guide you through the process of renewing your car insurance or help you find a new policy altogether. Keep reading to learn more about the car insurance renewal process and what to do if you accidentally let your policy expire.

Car insurance renewal

To better understand what happens when you fail to renew your car insurance policy before the expiry date, let’s dive into the definition of car insurance renewal. All auto insurance policies have set terms and conditions, which include a policy expiry date. Most insurance policies have expiry dates of one year from the date they become effective. On the expiry date is when coverage stops - unless you renew your policy, that is. Unless you have given your insurance company a reason not to renew your policy (e.g. if you had too many claims or recently got into an accident), they will usually give you the option to do so.

In fact, many insurance companies offer automatic policy renewals so long as you maintain a good driving record and make your payments on time. Assuming they are willing to renew your policy, the insurance company will send you new policy information for the upcoming term. This information may be sent by mail or email and will contain information about your premium. If your insurance company offers automatic renewals and you are happy with the updated policy information for the new term, you might not need to take any action (that said, we always recommend carefully reviewing the updated information and exploring your other options before agreeing to renew). Alternatively, if your provider does not offer automatic renewals, you may need to contact your insurance company to notify them that you would like to renew your policy. Either way, renewing your policy before the expiry date means no lapse or gaps in coverage, ensuring you and your vehicle remain protected for the term ahead.

Is car insurance renewal required?

No, renewing your existing car insurance policy is not required. That said, it is illegal to drive without car insurance in Canada, so if you choose not to renew your existing policy, you will need to make sure you find a new policy that begins on the date your existing one expires. If you let your policy expire before you’ve found a new one, you won’t be able to get behind the wheel until you do. Driving uninsured can result in serious consequences like fines worth tens of thousands of dollars, driver’s licence suspension, and even jail time, depending on the province. Furthermore, a gap in coverage can have negative consequences, such as making it more difficult to obtain car insurance in the future.

The consequences of an expired car insurance policy

If your car insurance policy expires in Canada, you will not only be without coverage but you will not legally be able to drive. This is because auto insurance is mandatory for drivers in every Canadian province and territory. We break down the consequences of letting your car insurance policy expire below:

  • No coverage: First and foremost, an expired auto insurance policy translates to no coverage. This means that if something goes wrong, you would have to pay for the incident entirely out-of-pocket. Keep in mind that the cost of a collision can be high. Between medical expenses, vehicle repair bills, and possible legal or settlement fees arising from a lawsuit, a lack of coverage can have serious financial consequences.
  • Legal trouble: The second consequence of an expired car insurance policy is that driving without insurance is illegal. If you decide to drive before renewing or buying a new policy and are caught, you could face legal trouble. The consequences of driving uninsured vary by province. But as an example, in Ontario, drivers can face fines of up to $25,000 for a first offense and up to $50,000 for a second offense, along with a 15% surcharge and the suspension of their driver’s licence.
  • Longer renewal process: Another repercussion of letting your car insurance policy expire is a longer, more complicated renewal process. If your policy has been expired for quite some time, it will likely take longer for you to renew your plan, should you decide to do so. This is because the insurance company may need to start over and calculate your premium from scratch. However, if you renew your policy before it expires, it may only be a matter of minutes.

What are the options if my car insurance policy expires?

Once your car insurance policy has expired, you will no longer be covered. At this point, you have a few options for how to proceed. The best option depends on your unique circumstances and how much time has passed since the expiry date.

1. Renew your car insurance policy immediately after the expiry date

The first option is to renew your car insurance policy right after it expires. An example of such a situation would be if you forgot to renew your policy, received a message from the insurance company saying that your coverage expired, and immediately contacted them to renew your plan. In this situation, there would usually be no major consequences. Though it is advised not to drive your car during the short window of time you are uninsured, your insurance company is unlikely to increase your premium or reject your application. And in most cases, coverage will begin right away upon renewal.

2. Renew your car insurance policy during the grace period

The second option is to renew your expired car insurance policy during the grace period following expiry. Grace periods vary by insurance providers and are commonly between 14 to 30 days. It's worth noting that you will not be covered during this grace period, and as such, similar to the example above, you should not drive your car during the grace period. It simply means that you can renew your policy during this period without facing any major consequences, similar to renewing your policy immediately following expiry.

3. Renew your car insurance policy after the grace period

The final option is to renew your car insurance policy after the grace period. This is typically the worst option as it leaves you without car insurance for a long period of time and increases the odds of a raised premium. If you fail to renew your auto insurance policy within the grace period provided, you may have to start over and reapply for a car insurance policy with your provider if you end up wishing to renew your policy. The issue is that since you now have a lapse in coverage on your record, the insurance company might raise your premium, increasing the cost of insurance. Therefore, not only does renewing your car insurance policy after the grace period make the process more lengthy and complicated, but it can also make your policy more expensive. In addition, if you continue to drive during this gap in coverage, you open yourself up to the legal ramifications that may come from getting caught driving uninsured.

Questions to ask yourself before renewing your car insurance policy

Whether you renew your policy before or after it expires, we recommend asking yourself a few questions to better assess your insurance needs and determine if sticking with your current provider is right for you. Your answers to the questions below can all impact your rates. So after asking yourself the following questions, get in touch with a BrokerLink insurance advisor to find out if renewing your existing policy or finding a new one is in your best interests.

  • Do I commute to work? How far do I drive each day? Has the amount that I drive each day changed over the past year?
  • Do I use my car for business?
  • Who drives my vehicle? Do I need to remove or add any occasional or secondary drivers?
  • Have my insurance needs changed? Does it make sense to increase or decrease my limits or add new coverage?
  • Do I use snow tires over the winter?
  • Have I added any upgrades to my vehicle (e.g. tint, aftermarket accessories)?
  • Did I recently add any vehicle security features, such as an anti-theft device?

Information needed to renew a car insurance policy

As mentioned, renewing your car insurance policy can be quick and convenient - assuming you do so before your existing policy expires or shortly thereafter. If you renew your policy before the expiry date, immediately after the expiry date, or during the grace period following the expiry date, you may only need to provide the most basic information, which is outlined below:

  • Mailing address
  • Contact information (phone number and email address)
  • Vehicle usage (how frequently you use your vehicle and what for)
  • Vehicle modifications (both physical and internal)
  • New drivers (i.e. if anyone new has started driving your vehicle regularly)
  • Traffic tickets (you must inform your provider of any traffic convictions, licence suspensions, or accidents that occurred in the past year)

Remember that if you try to renew a car insurance policy past the expiry date and grace period, you may need to start the process from the beginning, which means the information and documentation needed will likely be greater.

How to save money on your auto insurance renewal

Save money on your new auto insurance policy with the following tips:

Shop around

The most effective way of saving money on auto insurance renewal is by shopping around. Never assume that your current policy is still the best one for you. Insurance companies are constantly underwriting behind the scenes, which means that your existing policy could go up in price. Even if it stays the same or decreases, there is no guarantee that it is still the best value for your money. That is why shopping around is so important. Work with a broker to obtain and compare quotes from other Canadian insurance companies. This way, you can explore your options, helping you determine if renewing your current policy is the best move.

Pay for insurance annually

Another tip for saving money on auto insurance at renewal time is to pay for your new policy annually. Many insurance companies give you the option of paying for your policy in one upfront installment or twelve monthly installments. While the latter might sound more enticing, insurers often charge administrative fees for every payment made, which makes this option more expensive in the long run. If you can afford it, we recommend paying for your newly-renewed policy upfront.

Insure multiple cars together

If you recently bought a second car for your home (e.g. for your spouse or adult child), then renewing them together could save you money on your new insurance policy. Insurance providers like to reward loyalty, so the more policies you buy, the more you are likely to save. Insuring more than one car when an existing policy is up for renewal can save you 15% per policy. The same goes for if you purchase multiple types of insurance together (e.g. if you renewed your auto insurance policy and also purchase a home insurance policy).

Install snow tires on your car

A fourth tip for saving money at car insurance renewal time is to install winter tires on your car. In Ontario, policyholders who outfit their vehicles with winter tires can save up to 5% on car insurance. This is because insurance companies recognize that snow tires make driving in the winter safer, reducing your odds of an accident. If you are on the fence about installing winter tires on your car but want to save money on auto insurance, read through your insurer’s requirements and you may qualify for a discount.

Increase your policy deductible

Finally, if you are looking for a quick and easy way to reduce how much you pay for car insurance at renewal time, consider raising your policy deductible. Raising your deductible, even by as much as $500 or $1,000, is an effective way of saving money on car insurance. Most insurance companies will automatically lower your premium if you agree to take on more financial responsibility in the form of a higher deductible.

Tips for renewing your car insurance policy

Here are two tips for renewing your car insurance policy:

1. Review your current policy’s expiry date

The first tip to renewing a car insurance policy is to carefully review your existing policy. All auto insurance policies have a clear list of terms and conditions. Among these terms and conditions will be the policy expiry date. This date is usually one year from the date the policy began. Once you’ve confirmed this date, set a reminder on your calendar so that you can avoid missing this date. We also recommend making sure that your insurance company has your most recent contact information (email, phone number, and mailing address) as they will send reminders, either digitally or by mail, to notify you of your policy expiry. Additionally, if you already know you want to renew your policy, you can also see if your insurer offers automatic renewals. If they do, sign up for these. This way, when it comes time to renew, you won’t have to do anything and can avoid a gap in coverage.

2. Consult with an insurance broker

Our second tip for renewing a car insurance policy is to consult with an insurance broker. Insurance brokers at BrokerLink are experts in all things auto insurance. They can help explain your current policy, including its expiry date, and give you advice on whether renewing your existing policy is the right decision. When you enlist our help, you will receive a dedicated insurance advisor who will take the time to understand your needs and shop around on your behalf. By comparing quotes from other insurance companies, you can make an informed decision between staying with your current provider or purchasing a new policy.

Contact BrokerLink to learn more about renewing expired auto insurance

Want to learn more about renewing an expired car insurance policy? BrokerLink has been helping Canadians find quality car insurance policies since 1991, which means we know the ins and outs of the insurance industry. We can be reached by phone, email, or in person at any BrokerLink location in Canada. Drivers are also invited to take advantage of our online quote tool and receive a free car insurance quote in minutes.

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