Car Insurance Renewal Advice
Be sure to compare quotes from other providers first to make sure you're not missing out on better deals.
Last updated: 07/09/2021 | Estimated Reading Time: 5 minutes
Switching car insurers can seem like a hassle. It’s not, but providers spin a yarn about the ease of renewing your policy with them instead of taking out a new one.
Often, they stand to benefit financially from you renewing your policy. Don't let your insurance auto-renew without considering your options first though.
Typically, car insurance policies last for twelve months.
Towards the end of your contract – usually around 3-4 weeks before expiry – your insurer will contact you to notify you the policy term is coming to an end.
They’ll ask whether you want to renew your policy and explain what your new premium would be.
If you do decide to renew, doing so during this period (towards the end of your contract) is when your provider will offer you their cheapest premiums.
An auto-renewal clause means your insurance company will automatically renew your policy at the end of its term.
Why is this good?
Should remembering to renew your car insurance evade your mind, an auto-renew clause guarantees you’ll never be driving without insurance, which is illegal in the UK.
It means your cover won’t just stop when your policy is due to end. While most insurers auto-renew, don’t just assume this applies to your policy – it’s best to check.
But on the flipside, auto-renewing will rarely, if ever, give you the best car insurance deal on the market.
Sure, it’s hassle-free and convenient, but not necessarily in your financial interests. This is because it doesn’t pay to be loyal to your insurer.
A quick car insurance comparison will show you that you’ll grab a much cheaper premium by switching.
If your policy is set to auto-renew but you want to switch providers, that’s fine. You’re under no obligation to stay with your insurer and can call them any time to ‘turn-off’ auto-renewal.
We just advise you have another deal in the pipeline first, so be sure to compare car insurance premiums in advance. And vitally, make sure you contact them before your policy auto-renews, though if this doesn’t happen you may still be able to cancel…
As we mentioned, your insurer should write to you about a month before your policy is due to renew. But if you’ve missed this communication, you may find your policy auto-renews without your knowledge or wish.
Alternatively, you may have found another provider who offer a great deal on your motor insurance.
Should this happen, you can cancel your new policy within two weeks, which known as a 14-day cooling-off period; however, you’ll still have to pay for any cover you’ve benefited from during that time.
After that time, if you still want to switch car insurance providers, you’ll have to pay a cancellation fee. However, you might find it’s still cost-effective to do so if you’ll make better savings with another deal, so weigh up your options.
Your current insurer will let you know your premium for the following year if you were to stay with them.
Even if you haven’t made a claim, premiums typically stay the same or increase – you rarely see significant reductions.
This is why switching providers is the best way to get cheap car insurance.
As a note, you may also see an increase if your current premium was based on a discount deal or promotional offer.
When you renew car insurance policies as opposed to taking out a new one, although it’s unlikely you’ll have to pay additional administration fees, it’s not unheard of.
Check the terms of your policy to see if you’re actually getting a good deal and factor this into your decision.
Before the end of your policy term – usually at around 11 months in – begin to compare car insurance deals to gain a sense of what premiums are available.
Anomalies do occur, but in almost all instances you’ll save money by switching providers because you’ll tap into the best car insurance deals and discounts on offer to new customers.
On the other hand, if you really like your insurer – let’s say they offer superb customer service – then you might want to stick with them, but not at the price offered.
In this case, use results from your car insurance comparison as leverage to see if you can negotiate a better premium through them.