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

1. 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.
2. Check for hidden costs: Review your policy for any fees or charges that may not have been clear when you first signed up.
3. 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?

1. Driving record: Accidents, speeding tickets, and DUIs negatively impact your risk profile. Even one traffic violation can increase premiums by 10–15%.
2. Claims history: A history of frequent claims, especially at-fault accidents, signals higher risk to insurers.
3. 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.
4. Vehicle value and type: High-performance or luxury cars cost more to insure due to higher repair and replacement costs.
5. 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:

• Weather trends: An increase in severe weather events, such as hailstorms or floods, in your region may lead to higher premiums.
• 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: Programs like IntelliDrive or DriveSense 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

1. Check for renewal notices: Most insurers send reminders 30–60 days before the policy expiry date.
2. Evaluate your renewal offer: Look at the quoted premium and coverage. If the price has increased, contact your insurer for an explanation.
3. Update your information: Provide accurate details about mileage, vehicle modifications, or changes in use (e.g., switching from personal to business use).
4. 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.

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.
• Negotiate: If you have a clean driving record, you can ask your broker to check other markets for better rates.
• Consider policy adjustments: Increasing your deductible or removing unnecessary add-ons can help offset the higher premium.

Comparing new policies vs. renewing with your current insurer

While renewing with your current insurer may be easy, shopping around ensures you’re not overpaying or missing out on better coverage.

Pros and cons of switching insurers

Advantages:

• Access to competitive rates, if your current insurer isn’t meeting your needs.
• Coverage tailored to new circumstances, such as a newly purchased vehicle or added drivers.

Disadvantages:

• Cancellation fees if you’re mid-term with your current provider.
• Loss of loyalty discounts or perks, such as accident forgiveness.
• Potential gaps in coverage if the switch isn’t properly timed.

How to compare policies effectively

Get a quote from Westland: We have access to a large network of providers, so our advisors can help you compare quotes and coverages to find the best option for you.

• Read reviews: Customer reviews on platforms like Google or the Better Business Bureau can give insights into an insurer’s claims process and customer service.
• Understand the fine print: Check for exclusions, restrictions, and additional fees that may not be immediately obvious in a quote.

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.
• Failing to compare options: Even if you’re satisfied with your current insurer, comparing quotes could uncover better deals.
• 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.

Other tips to save on your car insurance renewal

Bundle insurance policies

Some insurers offer a home and auto bundle discount.

Plan ahead for renewal

• Set reminders 60 days before your policy expires.
• Use this time to gather quotes and review coverages with your broker.
• If you’re switching, overlap your new policy with the old one to avoid gaps.

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.