Renew Your Car Insurance

You should renew your car insurance for one simple reason: In most states, you can't drive without it. Liability insurance costs an average of $538.73 a year.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 20, 2020

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Here's what you need to know...

  • You should never get behind the wheel without having car insurance
  • Depending on your coverage, your insurance may do more than reimburse you in case of an accident
  • Liability insurance costs an average of $538.73 a year nationwide
  • Spend time shopping around for competitive rates before automatically renewing your policy

Regardless of whether you’re a new or veteran car owner, sooner or later the insurance policy on your vehicle will expire.

When the time comes to renew your car insurance, you should always do so, as it is the law, it will cover you from incurring costly bills, it will protect your assets, and it can be a convenient and rewarding experience.

Before you renew your car insurance, type your ZIP code into the FREE tool above to receive quotes from multiple car insurance companies today.

Depending on the state you live in and the company you bought your car insurance from, the length and expiration date of your current policy may vary.

Typically, most companies will try to notify their customers in advance as to when their current car insurance policy will expire; however, just to be safe, it’s always a good idea to check for yourself.

The last thing anyone needs is to get in an accident without having renewed their car insurance.

Do I have to renew my car insurance?

Although insurance requirements vary from state to state, most drivers are required to carry a minimum amount of insurance.

For example, the state of Oregon requires that all vehicles must be insured to cover $25,000 per person in terms of bodily injuries and $20,000 in damages that occur to another person’s property.

Another minimum insurance requirement, among others, includes $15,000 per person in personal injury protection, which provides compensation for reasonable medical expenses one year after the crash.

Due to the extensive and costly damages that can occur from a car accident, the penalties for driving without car insurance can be quite severe.

In the state of New York, for example, motorists who are involved in an accident without car insurance will have their license and registration revoked for at least one year.

In addition, motorists caught without car insurance can be fined up to $1,500 and offenders must pay another $750 to get their license back after revocation.

In other words, not only is it important to renew your car insurance because it’s required by law, but you also run the risk of losing your license and paying a substantial fine if you decide to drive without it.

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Cover Costly Bills

One of the key reasons state governments legislate that drivers must carry some degree of liability car insurance is because costly damages and injuries can result from a vehicle accident.

According to the Center for Disease Control and Prevention, motor vehicle accidents in 2009 were responsible for over $99 billion in damages, medical bills, and lost productivity due to corresponding injuries in the United States.

The American Automobile Association reports that high medical costs and property damages that are tied to car accidents would cost each American over $1,000 annually if the financial impact were divided throughout the population.

If you are involved in an accident without renewing your car insurance, you might be on the hook for thousands of dollars in expenses that could financially ruin you.

Due to these crippling costs, many drivers elect to take out additional policies to augment their required liability insurance, ensuring adequate protection in case of an accident.

For example, collision insurance provides some coverage for damages that you or your vehicle incur in an accident you have caused, unlike liability insurance.

Comprehensive insurance is another type of policy that helps cover damages your car might receive in a non-motorist related incident.

For example, comprehensive car insurance will cover damages that your car incurs from acts of nature, like a wind or hail storm. Such a policy will also cover repairs your car needs after it’s vandalized or broken into.

Prior to renewing your car insurance, you may want to see what kind of coverage your current policy entails and evaluate whether you have the kind of protection you and your family require.

Protect Your Assets

In addition to incurring costly medical and repair bills, your home, property and even your entire estate could be sought after in a lawsuit because of a car accident.

If you’re found responsible for causing an accident without any car insurance, there is an even greater chance you might be sued if the other people involved need to pay for their medical bills and repairs.

Due to the severe injuries that can result from a car crash, a person’s ability to work and provide for their family could be diminished or even terminated.

Their standard of living and ability to enjoy life could also be dramatically hindered.

Lawsuits are not uncommon in these unfortunate circumstances, which is why many people elect to take out car insurance policies that will help protect their assets and estate if they’re taken to court following an accident.

Is there a renewal fee for car insurance?

Another reason to renew your car insurance is that, if you’re happy with your provider and current policy, the renewal process is typically quite convenient.

Due to the serious physical and financial implications that can result from a car accident, insurance companies are required by law to notify you when your insurance policy is about to expire.

Often, they are required to give you 30 days in advance notice of the policy’s expiration date. Sometimes you’ll get a grace period in case you’re a few days late paying your premium.

As long as you’ve been paying your premiums, many companies will automatically renew your insurance policy for you unless you direct them otherwise.

As a result, the process of renewing your car insurance can be extremely easy without requiring a serious time commitment. If you do decide to renew with the same provider, however, it’s important to make sure that an automatic renewal will take place.

In some cases, if you haven’t been paying your premiums or you have made several claims on your current car insurance, your provider may notify you in advance that they will not be renewing your policy.

If you’re happy with your provider and have received the help and aid they promised to deliver, then renewing with the same company may set your mind at ease.

Some companies will reward customers for their continued business by offering discounts, particularly if they continue to have a clean driver’s record.

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Assess Your Needs

Even if you are happy with your current car insurance policy, it may be wise to assess your current needs and find out what other providers are currently offering before you renew with the same company.

The amount of insurance coverage you require may have changed for various reasons, and you may be able to find more affordable and comprehensive options with another provider.

There are many questions and factors to consider while you contemplate renewing your car insurance:

  • Have you changed professions lately?
  • Are you utilizing your vehicle more often for work?
  • Do these new driving responsibilities entail driving at night more often?
  • Are you driving during times when traffic is busier and more hectic?
  • Have you relocated?
  • Is anyone else driving your car on a regular basis?

These are all questions to consider, as they might affect the kind of insurance policy you need for your car. As a result, you may want to inquire with multiple insurance providers to see who can offer you the best and most affordable coverage.

While you do so, refer to your current policy as often as possible and research new insurance providers carefully, making sure that the options you are exploring are in fact better than your current coverage.

If you do find a policy from a different provider that better suits your needs and budget, you may want to relay this information to your current provider to see if they will match or beat the competition’s offer.

Even if your current provider only matches the competition, you might find it easier to just renew your car insurance at that point.

Canceling Your Policy

If after conducting some research, you decide to go with a different insurance provider, you will need to cancel the current policy for your car.

The most effective and reliable way to do this is to call your provider and inform them that you are canceling your policy. You will also want to confirm your cancellation in writing.

In fact, some companies require all cancellations to be done in writing.

Remember to inform your provider of the cancellation before the automatic renewal takes place to avoid paying any fines. And be sure to have another provider’s policy in place to insure your car as soon as it’s required.

Enter your ZIP code into the FREE box below and compare affordable rates from multiple companies now.

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