Why you shouldn't ignore your car insurance renewal notices

You've been there many times before: your car insurance policy is set to automatically renew by the end of your term (which, in most cases, is a year), and you let it go ahead, doing what feels like the hard work for you so you can focus on the long list of other things you have to do. 

In case that makes you feel lazy, not to worry — you are one of many: according to a 2016 survey by the Financial Services Commission of Ontario (which regulated auto insurance in the province until 2019, when it was replaced by the Financial Services Regulatory Authority of Ontario), when it came time to renew their auto insurance, 52% of Ontarians took no action, and let their policy automatically renew. Meanwhile, 16% couldn't even remember if they had taken any action at all during their last renewal.

Continued car insurance is essential. You cannot legally drive in Canada without it. But while auto-renew may seem like the easiest option, it isn't always the most cost-efficient. 

Why you shouldn’t ignore those car insurance renewal notices

Some protections included in your insurance policy might have an expiration date that you forgot to note, such as a waiver of depreciation, and they might be removed at your next renewal or, worse, get more expensive to carry after a certain number of years. Perhaps you'd like to adjust your coverage and add, for example, more accident benefits or collision and comprehensive coverage. Whatever the case, you want to be aware of exactly what's included in your policy at any given time.

A renewal gives you the opportunity to take a fresh look at your policy and see how, exactly, it's still serving you. You may even decide to go with a different provider altogether. If you do, a renewal is the most opportune time to do so, as some companies will charge you penalties for cancelling at any other period during your term. 

Renewals are also a good time to advise your insurance provider of any changes to your basic information, such as your address or occupation, how many kilometres you drive each day, how you use your vehicle (personal versus business), or if someone else is now driving it, and so on. To make the renewal process as easy as possible, contact your insurance provider directly so they can run over a checklist with you. If you don’t update your insurance provider about changes like these, you could run the risk of having your policy cancelled.

Letting your car insurance auto-renew could cost you money

Another key reason to review your policy at the time of renewal is because rates change. Even if you’re a great driver, you could face higher premiums upon renewal. Rates can shift based on a number of factors, including your driving history, where you live, the number of claims in your area, the type of coverage you choose to carry, and so on. 

That said, if your premiums rise, that doesn't mean there’s nothing you can do about it. Another insurance provider might be able to offer you the same protections but at a more affordable price. Renewal time is a great time to compare car insurance rates and make sure you’re getting the best price for your needs.

It’s also worth finding out what discounts you might be eligible for, like if you have a clean driving record, are retired, are a long-time customer, or insured by the same company for your home and car insurance.

You can always make changes to your policy later on, too; renewal is not do or die. But regularly comparing the market and staying on top of industry trends so you know you’re getting the best deal on car insurance is always smart – especially if you like saving money.