Monday, 25 December 2023

Why You Should Never Ignore Your Car Insurance Renewal Notice

by Earn Media

Why You Should Never Ignore Your Car Insurance Renewal Notice

Image source: Getty Images

Maybe this has happened to you.

You get an email or letter informing you that your car insurance policy is set to renew. You have about a month, it says, to make changes before the auto-renew kicks in. You’re already juggling a million tasks (getting the kids out the door for school, taking care of that thing at work, prepping your notes ahead of an interview), so the last thing on your mind is checking your insurance policy before it renews. You let it auto-renew and get back to the busyness of your life.

If that sounds like you, you’re not alone. Many drivers simply don’t have the time or patience to scrutinize their car insurance policies at every renewal period. You already did the hard work upfront six or 12 months ago. Why open that can of worms again when your car insurance company can just reinstate your policy?

Truth is, ignoring your car insurance renewal notice could be costly. You might be super busy, but here’s why your car insurance company is hoping you don’t double-check that renewal notice.

Rates can swing drastically from year to year

The reason you should double-check your renewal notice is that your car insurance rate may have gone up — sometimes for no apparent reason.

Car insurance rates are notoriously fickle. While you may have originally locked into the cheapest car insurance for you, the market could very well have changed at the time of your renewal. Unfortunately, most car insurance companies won’t point out when your rate increases, leaving it up to you to catch the higher premium on your renewal notice.

Occasionally, your rate will go up because you filed a claim or had a traffic violation. But more often than not the reason is outside your control. For example, the drivers in your area may have filed numerous claims with your insurer, thus raising premiums for all drivers. Or, the parts for your car may be more expensive, thus making it more risky for your car insurance company to insure you.

Even though many car insurance companies claim their rates are the cheapest, the truth is no company is consistently the cheapest every year. That’s why it’s super important to compare car insurance companies consistently year after year, as you could snag a lower rate by switching to another insurer.

What you should do if you notice a different rate in your renewal notice

Easy — shop for car insurance.

The premium you get through one company won’t be the same as the premium you get through another. Sometimes, the rates will be so close it would be insignificant to choose one on price alone. But every now and then there’s a clear winner among car insurance companies — sometimes saving you hundreds of dollars.

Even if the rate enclosed within your renewal policy is roughly the same (in other words, it hasn’t gone up), don’t assume you’re still getting the best deal. It still pays to compare that rate with two to three car insurance quotes you gather online. You never know what another car insurance company will offer you just to entice you to switch.

So if you get that car insurance renewal notice, don’t toss it aside. Take a look at your rate and see if you can find a lower one with another car insurance company. Getting the same car insurance coverage for a lower price is a surefire way to save money — and doing that consistently over your lifetime could turn into thousands of dollars saved.

Our best car insurance companies for 2022

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