At the end of your policy period, you can either renew your car insurance or shop for new coverage to avoid an insurance lapse.
Updated Dec 21, 2023 · 4 min read Written by Isabel Contreras Lead Writer Isabel Contreras
Lead Writer | Auto insurance
Isabel is a lead writer at NerdWallet covering auto insurance. She's also got a knack for finding stories buried in data. Previously, Isabel worked as a personal finance writer for Morning Brew’s Money Scoop and as a markets reporter at Forbes, where she covered everything from fintech and crypto to billionaires and IPOs. Isabel earned her bachelor’s degrees in journalism and economics from Boston University, where she fostered a passion for throwing intimidating jargon out the window to make financial topics accessible to all. She is originally from Mexico City and is currently based in Brooklyn, New York.
Reviewed by Brenda J. Cude Professor Emeritus, University of Georgia Brenda J. Cude
Professor Emeritus, University of Georgia
Brenda J. Cude is Professor Emeritus in the Department of Financial Planning, Housing and Consumer Economics at the University of Georgia. Dr. Cude has served in various consumer-focused roles for the National Association of Insurance Commissioners since 1994. She has also been a member of the Advisory Council for the Center for Insurance Policy and Research; a Board Member of the Coalition Against Insurance Fraud; a member of the Federal Advisory Committee on Insurance; and a Board Member for the Insurance Marketplace Standards Association. Dr. Cude’s primary research interest is consumer decision-making, with an emphasis in personal financial literacy.
At NerdWallet, our content goes through a rigorous editorial review process. We have such confidence in our accurate and useful content that we let outside experts inspect our work.
Assistant Assigning Editor Ben Moore
Assistant Assigning Editor | Auto insurance
Ben Moore is an assistant assigning editor and spokesperson who joined NerdWallet as a writer in 2020. An auto insurance authority, his past work has been featured in The Associated Press, The Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. Ben has been quoted in Martha Stewart and Real Simple magazine, and he has appeared on local broadcast television. He is based in Nashville, Tennessee.
Fact Checked
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Nerdy takeawaysAuto insurance renewal is typically a straightforward process. In most cases, it’ll happen automatically: When your policy is close to expiring, your insurer will send you an updated rate. If you’re enrolled in automatic payments, your insurer will charge that amount to your account and you’ll maintain your coverage.
Here’s what to know about an auto insurance renewal.
Auto insurance policy periods are usually about six or 12 months. Once you near the end of your current policy term, you’ll receive an email or a letter from your insurer that will include the terms it will offer you to renew your policy. Some specifics around your coverage may change, and your car insurance rate will likely increase.
Once you receive that information, you’ll have two options: Renew your current policy with the updated rate or shop for a new one.
Chances are you won’t need to take any action to renew your policy. With most providers, car insurance automatically renews. If you’re happy with your current insurer and want to stick with it, all you’ll need to do is review your updated rate and meet the deadline for your first payment under the new policy. If you’re already enrolled in automatic payments, you’re good to go.
But if you’d like to ensure you’re getting the best deal for your coverage, shop around and compare quotes from other companies before you commit to your current insurer’s new rate.
If you shopped around and found a more attractive auto insurance policy, make sure your current policy does not renew for another term. This is especially important if you have automatic payments set up, since your insurer will charge the new premium to your account unless you cancel the policy.
Contact your insurer before your current policy’s expiration date to let the company know you won’t be renewing. Also get in touch with your provider to check whether you’ll need to submit a letter of cancellation, or whether you can cancel your policy through email or by calling its customer service number. If you bought your policy through an agent, contact them instead.
You can also switch insurers at any time by canceling your current policy and buying a new one; there’s no need to wait out your policy term.
If you cancel a policy that you paid for in advance, your insurer will send you a refund for coverage you paid for but did not use. Be aware that you could be charged a cancellation fee or other costs if you cancel your policy midterm.
An auto insurance company can cancel or refuse to renew your policy as a consequence of things like driving record issues or missed insurance payments.
Here is the difference between a policy cancellation and nonrenewal.
Cancellation can put an end to your current insurance policy at any time. But after 60 days pass since the start of your policy, your auto insurance provider cannot end your coverage for just any reason. Your policy could be canceled if:
You receive a DUI conviction. You have your driver’s license revoked or suspended. You make several late payments or fail to pay your insurance premium. You commit insurance fraud.Nonrenewal happens when your insurer decides against renewing your policy at the end of the coverage term. The company has to give advance notice and explain why it is not renewing. A nonrenewal can occur if:
You had multiple accidents in the past three years, especially if you were at fault. You filed too many insurance claims. Your insurer decided to offer fewer policies in your area. Your insurer stopped offering the type of insurance you had purchased.If your insurer cancels or won’t renew your policy, request quotes from a variety of car insurance providers quickly to be sure you maintain coverage and avoid an insurance lapse. A lapse in coverage could mean you end up paying more for car insurance.
If you don’t renew or replace your car insurance policy by the time your current policy expires, your insurance will lapse and you’ll be left uninsured. Driving without insurance is illegal in most states and can result in a fine or license suspension if you’re pulled over. Lacking coverage can also have extensive financial consequences if you cause a car accident that results in injuries or property damage. Any expenses you’re responsible for would be paid out of your own pocket.
A lapse in auto insurance can also cost you when you decide to get a new policy. If insurers see a lapse on your record, they’ll almost certainly offer you a higher quote when you shop for a new car insurance policy. That’s because insurers see drivers with an insurance lapse as riskier to insure.
While you'll want to always try to prevent a lapse in coverage, life can sometimes get in the way. Some insurers may give a short grace period to renew your car insurance if you missed the deadline. However, note that you may still have a lapse in coverage from the date your previous policy expired and the day you renewed it.
If you are unable to renew your previous car insurance policy, you can always purchase a new one. You can opt to stay with your previous insurer or switch companies.
About the authorYou’re following Isabel Contreras
Visit your My NerdWallet Settings page to see all the writers you're following.
On a similar note.
Instantly compare top auto insurance companies.
Get started
Download the app
Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.
NerdUp by NerdWallet credit card: NerdWallet is not a bank. Bank services provided by Evolve Bank & Trust, member FDIC. The NerdUp by NerdWallet Credit Card is issued by Evolve Bank & Trust pursuant to a license from MasterCard International Inc.
Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
NerdWallet Compare, Inc. NMLS ID# 1617539
California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812
Insurance Services offered through NerdWallet Insurance Services, Inc. (CA resident license no.OK92033) Insurance Licenses
NerdWallet™ | 55 Hawthorne St. - 10th Floor, San Francisco, CA 94105
