Renewing Car Insurance

11 minute read Published on Nov 11, 2022 by BrokerLink Communications

Woman signing car insurance renewal form.

Looking to renew your car insurance policy but aren’t sure how? BrokerLink is here to help. Learn about renewing auto insurance, including how to renew your policy, what information you need to renew it, and a few of the most common reasons that insurance rates go up upon renewal.

What is car insurance renewal?

Car insurance policies have specific terms, and these terms include an expiry date. Most insurance policies have expiry dates of one year from the date they become effective. At the end of the term on the expiry date, your policy officially becomes up for renewal. With many insurance companies, policies renew automatically as long as you maintain a good driving record and make your payments on time. Before a policy is automatically renewed, the insurance company will send your new policy information for the upcoming term. This information can be sent by mail or email and will contain information about your premium. Generally speaking, there are four possible outcomes at renewal time: the insurance company offers you the same rate, increases your rate, decreases your rate, or cancels your policy altogether (i.e. your provider does not renew your policy).

If your insurance provider offers automatic renewals and you are happy with the updated policy information for the new term, you might not need to do anything. However, it’s always wise to carefully review the updated information, along with your other options, before accepting the renewal. While automatic renewals are easy and convenient, they could be costing you money - especially if your insurer increases your rate. That is why, anytime your policy is up for renewal, we recommend contacting a broker who can shop around on your behalf to ensure you're getting the best rate. After all, a lot can change in a year that impacts your rates. For example, you may qualify for a new discount that you didn’t previously or your driving habits may have changed, any of which could earn you a lower rate than your current provider is offering.

Do I need to renew my car insurance policy?

No, you do not need to renew your current car insurance policy with your provider. However, you must have a valid car insurance policy before getting behind the wheel. So if you do not like the new terms offered by your insurer, you will need to find new coverage with a different provider before your existing policy officially expires. Remember that a lapse in coverage can have negative consequences, such as making it more difficult to obtain car insurance in the future. Plus, driving with an expired policy is the same as driving uninsured, which is illegal throughout Canada. Car insurance is a legal requirement in all Canadian provinces and territories. Getting caught driving without insurance can result in hefty fines, jail time, and the suspension of your driver’s licence.

Why did my auto insurance rate increase upon renewal?

As mentioned, one of the possible outcomes around renewal time is that your insurance provider can increase your rates. In such an instance, you may be left wondering why. A few of the most common reasons for increased car insurance rates are as follows:

Traffic tickets

In the eyes of an insurance company, traffic tickets increase your odds of getting into a collision. So if you racked up new traffic tickets in the last year, your insurance premium may increase because of it.

At-fault accidents

Similar to the logic behind traffic tickets, getting into an at-fault accident can cause your insurance rate to go up. Generally speaking, the poorer your driving record (i.e. the more accidents, tickets, or incidents you’re involved in), the more you will pay for car insurance.

New drivers or cars

If you add a new car to your policy or replace an existing car with a new one, your insurance rate may go up, especially if your new vehicle is more expensive to replace or repair than your last vehicle. Similarly, adding new drivers to your policy can also increase your premium, especially if the driver is newly licenced and/or under the age of 25 years old. Each driver’s premium is partially dependent on the years they have been licenced and their driving experience, which is why younger drivers with limited experience tend to have the highest premiums.

High insurance claims in your neighbourhood

Another reason your auto insurance rate may have increased upon renewal is if there were an increase in insurance claims in your neighbourhood. Where you live is one factor that influences insurance rates. If there were changes to trends in your neighbourhood, such as more incidents of theft or vandalism, accidents, or weather-related claims, your insurance policy may go up in price.

Loss of insurance discounts

There are all kinds of car insurance discounts available to drivers, from safe driver discounts to winter tire discounts. Changes in circumstances might make you ineligible for said discounts, which could increase your rate. For example, if you maintained a clean driving record and earned the safe driver discount, but then you got into an accident, you may no longer qualify for this discount, which likely means your new policy would be more expensive.

Adding new insurance coverage

One final reason that your car insurance rates may increase upon renewal is if you add new insurance coverage or up your limits. The insurance coverage you select has a major impact on how much auto insurance costs. So if you previously only purchased the minimum coverage requirements but later decided to add an optional coverage, like collision, comprehensive, or accident forgiveness, your rates will likely go up. The same will happen if you increase your limits on existing coverage, such as raising your third party liability from $200,000 (the minimum amount in many provinces) to $1,000,000.

Please note that it’s possible for an insurance company to increase your premiums even if you had no claims, tickets, or at-fault accidents. The reality is that there are several factors outside of a driver’s control that can cause their insurance rates to go up. Below is a list of factors, outside of claims, that could affect the cost of car insurance upon renewal:

  • Changes to underwriting rates to account for factors like inflation
  • Increased costs of parts for the vehicle you drive
  • Change in credit score

Why did my insurance provider cancel my car insurance policy?

If you receive a notice informing you that rather than renewing your policy, your insurance company is going to cancel your policy, it is likely due to changes in your driving record or history. For example, if you were involved in an at-fault accident or were convicted of a major traffic violation, such as a DUI, the insurance company may cancel your policy. In addition, if you filed too many claims or had payment issues like making payments late or not paying at all, these would also be grounds for the insurer to cancel your policy. If your auto insurance policy is cancelled, you may need to purchase high-risk auto insurance. Be sure to speak with an experienced broker to learn more about how how-risk insurance works.

Questions to ask yourself before renewing your car insurance policy

Before renewing your policy, ask yourself a few questions. The answers to the questions below could have an impact on your insurance rates. Whether they serve to increase or decrease your rates, it’s important to speak with an insurance broker to understand what factors influence insurance costs and what you can do to keep your costs as low as possible.

  • 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?

Can I change my car insurance policy before the renewal date?

Yes, you can change your car insurance policy before the renewal date. However, doing so can have consequences. Depending on the terms of your existing policy, cancelling your plan before the term ends could result in a penalty or administrative fees. Depending on how much money you would be saving by switching to a new plan, it may or may not be worth it to wait until your existing plan expires. In comparison, waiting until a policy expires to switch providers is usually the most convenient option. You generally will not face any penalties and can simply inform your current company that you do not wish to renew your policy. From there, you can purchase a new, better policy from a new provider. If you aren’t sure whether to stick with your current provider or not, contact BrokerLink. We can shop around and compare rates on your behalf to ensure you are getting the best coverage at the lowest possible rate.

Information drivers must provide to renew car insurance

If you wish to renew your car insurance policy, you must be prepared to provide the following information (make sure to notify your provider of any changes to your address, vehicle type, or vehicle usage):

  • 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)

How to save money on car insurance at renewal time

Save money on your car insurance renewal by following the tips below:

Don’t wait until renewal time to shop around

Waiting until you receive your renewal notification won’t give you the time you need to consult with a broker and compare quotes. The reality is that a lot can change in a year. Whether you moved, got a new car, or your teenager got their driver’s licence, tons of factors can affect your rates. This is why it’s so important to compare coverage options before automatically renewing your current policy. As renewal time approaches, contact an insurance advisor at BrokerLink. They can help you find the coverage you need at a great price.

Increase your policy deductible

You might be able to save money on your car insurance renewal by increasing your deductible. Increasing your deductible by as much as $1,000 or as little as $500 could save you money on car insurance. Insurance companies are typically willing to reduce rates for policyholders that raise their deductibles.

Pay for insurance annually

Another way to save money come renewal time is to pay for your new policy annually. This is because many insurance companies charge an administrative fee for each payment made. Therefore, making a one-time payment each year as opposed to paying in monthly installments can save you money.

Insure multiple cars together

If you recently bought a second vehicle, or someone in your household bought a new car, consider insuring them together. Insuring multiple cars with the same provider could save you between 15% and 20% on each policy.

Bundle insurance policies

A general rule of thumb in the insurance industry is that the more money you spend with an insurance provider, the more likely they are to give a discount. So if you need to buy additional insurance coverage, such as home insurance or business insurance, consider purchasing it at the same time as your car insurance renewal. Bundling insurance policies can save you 15% on each policy.

Install snow tires on your vehicle

Installing winter tires on your car could make you eligible for an insurance discount of up to 5%. Insurance companies recognize that snow tires make driving safer and minimize the odds of getting into an accident over the winter months, and they will reward you accordingly. If you recently made the decision to install winter tires on your car, make sure you notify your insurance provider.

Buy a hybrid or electric vehicle

If you’re in the market for a new car, consider purchasing a hybrid or electric vehicle. Many insurers offer discounts of up to 10% on car insurance to drivers of eco-friendly vehicles. Be sure to notify your insurance company about a change in vehicle at renewal time and you could save.

Three tips to ease renewing car insurance

1. Consult with an insurance broker

Our first tip for renewing car insurance is to enlist the help of an insurance broker. Insurance brokers are insurance experts who work independently of insurance companies. This means that you can trust them to provide their objective, unbiased opinion on the best car insurance for you. BrokerLink is available to talk through your needs, shop around on your behalf, and compare quotes to help you find the most comprehensive coverage at the most affordable price.

2. Understand your current policy and consider add-ons

Anytime your policy is up for renewal, it’s a good idea to review your current policy. You should have a firm grasp of how much coverage you currently have and what each type of coverage includes. You should also know what the mandatory minimum coverage requirements are in your province. For example, in Ontario, all drivers must have $200,000 third party liability coverage, in addition to uninsured automobile coverage, accident benefits coverage, and direct compensation - property damage coverage. From there, take the time to consider if your current coverage is enough. If your circumstances changed in the past year, it might be worth adding additional coverage, either by raising your limits or purchasing optional coverage, like comprehensive or collision coverage.

3. Don’t be afraid to ask about insurance discounts

Make sure to check with a broker or insurance company if you qualify for any car insurance discounts. For example, you might be eligible for a discount if you recently turned 55, if you are a retiree with no income, if you completed an approved driving course in the past year, if you installed a safety or anti-theft device in your car, or if your driving habits changed and you're now a low mileage driver.

Contact BrokerLink to learn more about renewing car insurance

Still have questions about renewing car insurance? BrokerLink has been helping Canadians find quality car insurance policies since 1991, which means we know the ins and outs of the insurance industry. Whether you want our advice on whether to renew your current policy or find a new one or need help deciding between coverage options, give us a call. We can also be reached online or in person at any BrokerLink location in Canada. Drivers can take advantage of our online quote tool and receive a free auto insurance quote in minutes. Learn more about car insurance renewal by getting in touch with BrokerLink today.

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