Car insurance renewal guide
Keeping your car insurance policy up to date isn’t just important—it’s essential. Staying on top of your car insurance renewal ensures you remain financially protected in case of an accident, and compliant with Canadian law. Whether you’re renewing your car insurance for the first time or considering switching providers, this comprehensive guide will walk you through everything you need to know.
Why renewing car insurance is crucial
Renewing your car insurance is not just a formality; it’s a critical step in maintaining financial security and legal compliance. Car insurance renewals typically come up every 12 months, but this can vary depending on the type of insurance you opted for when purchasing a policy. Stay in touch with an advisor to ensure you don’t miss your renewal date.
The impact of lapsed insurance
Allowing your car insurance to lapse can result in severe consequences:
- Loss of financial protection: Without coverage, you’ll be responsible for the full cost of damages or injuries caused by an accident. These costs can run into tens of thousands of dollars or more, depending on the severity.
- Difficulty obtaining future insurance: Insurers view lapses in coverage as a sign of increased risk, which could lead to higher premiums or rejection when applying for a new policy.
- Immediate liability: Even if you’re not at fault in an accident, the other party’s insurer may pursue compensation from you directly if you lack coverage.
Legal implications
Driving uninsured in Canada is illegal, and the consequences vary by province:
- License suspensions: In provinces like British Columbia, driving without insurance can result in immediate license suspension.
- Criminal charges: Repeat offenses can lead to serious legal repercussions, including criminal charges.
- Long-term consequences: An uninsured driving conviction may stay on your driving record, affecting your insurance rates for a few years.
Renewing your insurance promptly ensures continuous protection and compliance with the law.
Understanding your current policy
Before renewing, take the time to evaluate your existing policy. This step allows you to confirm that your coverage aligns with your current circumstances.
How to review your existing coverage
- Break down your policy: Understand the coverage limits for liability, collision, and comprehensive. In most provinces, liability coverage is mandatory, but additional coverages may be optional.
- Assess your deductible: A deductible is what you’ll pay out-of-pocket before your insurer covers the remaining costs. Make sure your deductible is affordable in case of an accident.
For help reviewing your car insurance, reach out to Westland. One of our local experts would be happy to review your policy and help you assess your needs before renewing.
Common coverage gaps
Many drivers overlook specific risks that could leave them exposed:
- Underinsured liability limits: If your policy only meets provincial minimums, you might lack adequate protection in a severe accident. Consider increasing your liability coverage to $1 million or $2 million. Settlements involving serious injuries can often exceed $1 million.
- Comprehensive coverage exclusions: Policies may exclude damage caused by floods, earthquakes, or vandalism. Evaluate whether additional endorsements are necessary based on your location.
- Usage changes: If you’ve started using your vehicle for business purposes (e.g., delivering food or ridesharing), you may need a commercial policy.
Factors affecting renewal premiums
Many policyholders are surprised to see their premiums change at renewal, even if they haven’t filed claims or had accidents.
What determines your premiums?
- Driving record: Accidents, speeding tickets, distracted driving tickets, and DUIs negatively impact your risk profile. Even one traffic violation can increase premiums by 10–15% or more, depending on the type of ticket received.
- Claims history: A history of frequent claims, especially at-fault accidents, signals higher risk to insurers.
- Demographics: Your age, gender, and marital status can influence premiums. For example, younger drivers under 25 typically face higher rates due to limited driving experience.
- Vehicle value and type: High-performance or luxury cars cost more to insure due to higher repair and replacement costs.
- Geographic location: Living in areas with high traffic density or crime rates can increase your premiums.
How insurers calculate risk
Insurance companies rely on algorithms and statistical models to predict risk. For example:
- Industry trends: Rising medical and vehicle repair costs impact claim payouts, which insurers pass on to customers in the form of higher rates.
Practical steps to lower your premium
- Enroll in a telematics program: Some providers offer programs to monitor driving habits and may reward safe drivers with discounts of up to 25%.
- Opt for usage-based insurance: If you drive fewer kilometers annually, some insurers may offer a pay-per-kilometer policy that reduces costs.
- Improve your credit score: In some provinces, insurers consider credit scores when determining premiums. Paying bills on time and reducing debt can improve your score and reduce your rates.
Navigating the renewal process
Renewing your car insurance doesn’t have to be a hassle. Understanding the steps involved can make the process seamless.
Steps to renew your policy
- Check for renewal notices: Most insurers send reminders 30–60 days before the policy expiry date.
- Evaluate your renewal offer: Look at the quoted premium and coverage. If the price has increased, contact your insurer for an explanation.
- Update your information: Provide accurate details about mileage, vehicle modifications, or changes in use (e.g., switching from personal to business use).
- Finalize your renewal: Choose your preferred method—online, through a broker, or in person. Many insurers now offer one-click renewals online for added convenience. Some insurers automatically renew your policy, but changes may be made to the renewal if required. Stay in touch with your provider to understand any changes for the coming year.
What to do if your premium increases
Premium increases are common, but you don’t have to accept them without question.
- Ask about discounts: Check if you qualify for safe-driver rewards, multi-policy discounts, or alumni/group affiliation discounts.
- Consider policy adjustments: Increasing your deductible or removing unnecessary add-ons can help offset the higher premium.
Common mistakes to avoid during car insurance renewal
Avoiding these errors can save you time, money, and stress:
- Not updating your information: Providing outdated details could result in an invalid claim.
- Ignoring discounts: Many people miss out on savings simply because they don’t ask.
- Over-insuring or under-insuring: Ensure your coverage matches your actual needs to avoid paying for ones you don’t need, and to make sure you have the ones you do need.
Remember to plan ahead for renewal
Don’t wait until it’s too late. Remember to:
- Set reminders 60 days before your policy expires.
- Use this time to gather quotes and review coverages with your broker.
- If you’re switching, make sure you have a new policy in effect to coincide with the expiry of your existing policy to avoid gaps in coverage.
Frequently asked questions about car insurance renewal
Q: What happens if I forget to renew my insurance?
If your insurance lapses, you’ll lose coverage, face potential legal penalties, and may pay higher premiums when reapplying.
Q: Are there penalties for cancelling my policy mid-term?
Most insurers charge cancellation fees. However, these fees may be worth it if you find significantly better rates with another provider.
Q: Will my car insurance automatically renew?
Most car insurance policies in Canada will automatically renew, considering you’re in good standing with them. Even if your policy will automatically renew, it’s still a good idea to shop around to see if you can find a better rate.
Protect yourself—renew your car insurance with confidence
Renewing your car insurance is more than a legal obligation—it’s an opportunity to reassess your coverage, explore cost-saving options, and ensure peace of mind. Whether you choose to renew with your current provider or switch to a new one, staying informed and proactive is key.
Don’t wait until the last minute — contact Westland to start your renewal process today and drive with confidence, knowing you’re fully protected.