How does car insurance renewal work?
Most car insurance companies will auto-renew your policy at the end of its 12-month term.
This means a few weeks before your policy is due to end you’ll receive an email or letter from your car insurer that tells you they will renew your policy.
If you don’t do anything, you will continue to be insured by that company and money will come out of your account on the usual date. If you're not happy with your price, now is the time to act.
Be aware that premiums may change at renewal so if you do nothing you may find you end up paying more.
It’s often worth negotiating with your insurer or shopping around to find a better price.
Although car insurers usually auto-renew policies, you are under no obligation to stick with the company you’ve been with. And some insurers will give you a choice about whether you’re happy for a policy to be renewed automatically when you first sign up.
Even if you sign up for auto-renewal you can inform them you are switching companies at the end of the policy and they will stop the policy on the final day of its term.
If you do this, it’s up to you to make sure you're covered by a new company and there are no gaps in your insurance. It’s illegal to run a car without insurance.
One of the few good things about auto-renewal is that it means you’re always covered.
It’s also a good opportunity to check all your details are correct. If you’ve changed address or someone else is now driving your car it could invalidate your policy if you haven’t told your insurer.
A small number of insurers will take a ‘deposit’ from your bank account the month before your renewal to encourage you to stay with them. When you renew, the deposit will be used as your first month’s payment. This is an aggressive renewal tactic and if you wish to cancel at the end of the policy the company should refund the deposit it has taken.
Some companies may charge an admin fee at renewal (around £30 to £50) but this is rare.
Learn more about:
- How does car insurance renewal work?
- Car insurance renewal quotes
- I didn't receive my car insurance renewal – what to do
- When is my car insurance due for renewal?
- Can I change car insurance before the renewal date?
- Cancelling car insurance after your renewal date
- How to cancel your car insurance renewal
- Why is my car insurance renewal so expensive?
- Car insurance renewal refund
- Find out how companies handle renewals
- Car insurance renewal reviews
Car insurance renewal quotes
When looking for new quotes, first find out how much your car insurance renewal is.
Your insurer should get in touch and let you know how much your existing premium is and how much your new policy will cost. If they don’t, contact them to find out before your policy ends. If you cancel after renewal you may be charged an admin fee.
If your premium has increased and you want to get cheaper insurance your two options are shopping around and moving to a new company or negotiating with your existing insurer.
It’s often best to shop around before approaching your insurer because if you find a cheaper quote you can use it as a bargaining tool.
Find out about the best car insurance companies here.
Don’t be worried about negotiating. Companies will often knock significant amounts off a renewal price as soon as you say it is too much. And if the insurer you’re with doesn’t offer a fair price you’re well within your rights to go with someone else.
It’s worth looking at other quotes a month before your policy comes up for renewal. If you contact your insurer in the three months before renewal you can ask them about locking in a certain price so you don’t have to negotiate.
Another way to get a cheaper quote is by asking about discounts. Most insurers offer multi-car discounts and some have deals if you buy other insurance products from them, such as home or travel cover.
If you’re a young driver you may benefit from black box car insurance.
As mentioned previously, a handful of insurers add an admin fee to your renewal quote.
Although premiums often increase at renewal, it’s important to understand why. We look at why renewals can be expensive here.
I didn't receive my car insurance renewal – what to do
Insurers are required to contact you a few weeks before your renewal to confirm the price you have been paying and let you know your premium for the coming policy year.
If you haven’t received your car insurance renewal it’s best to contact your insurer, it may have been a genuine mistake.
If you feel service has been poor you can complain, which is also the case if your renewal comes through a few days before the end of your policy. Your insurer should give you time to shop around and decide whether you want to switch companies.
Make sure your contact preferences are correct - if you’re expecting a renewal email and your insurer sends you a letter you may miss it.
If you do need to contact your insurer to chase a renewal there are a range of options. Many people go straight to the phone to call customer services, but this can be a frustrating process. Lots of insurers now offer a live chat feature online, which can be convenient for people working 9 to 5.
It may be possible to email your insurer.
When is my car insurance due for renewal?
Nearly all car insurance policies last a year so your cover will renew 12 months after you bought it.
If you can’t remember when you bought it, don’t worry. Your insurer will contact you about 21 days before renewal date to let you know when your policy will auto-renew or expire.
If you want to check your car insurance renewal date at any time during the policy year you may be able to do so online if your insurer has an online account feature. If not, you can contact your insurer to ask them when your renewal date is.
Can I change car insurance before the renewal date?
Yes, but you may have to pay a fee and cover the cost of the length of the policy you have used.
If you’re looking to switch, check out our guide to the best car insurance companies.
If you paid a lump sum for a year’s cover you may be able to ask for a refund for the months you haven’t used but you’re still likely to be charged some sort of fee.
If you want to change companies at your renewal date you’ll need to contact your existing insurer to cancel the auto-renewal.
You may want to request a confirmation that they will not renew your policy.
When you switch car insurance, make sure there are no gaps in cover. It’s an offence to drive without insurance.
Cancelling car insurance after your renewal date
There is a 14-day cooling off period when you buy a car insurance policy, which also applies at renewal.
If you cancel in the 14-days after you renew you may have to pay a fee and cover the days you have been covered for but it shouldn’t cost too much.
It is possible to cancel after the cooling off period but the fees may be higher.
If you find your premium has rocketed it can be worth paying the fees if you can find a policy where the savings will be greater than any cancellation costs. Just make sure you are comparing policies with the same levels of cover.
How to cancel your car insurance renewal
If you want to stop your car insurance auto-renewing you can contact your insurer at any time during the policy year to ask them to let the policy expire at the end of its term.
Some insurers will ask you whether you want the policy to auto-renew when you buy it. If you decide against it, you won’t need to do anything when it comes to renewal, your policy will end on its final day. But don’t forget to find a new company or manually renew so that there is no gap in your cover.
Insurers that offer online accounts may allow you to update your renewal preference in your account settings.
Why is my car insurance renewal so expensive?
Car insurance premiums often increase at renewal so if you’re wondering why your car insurance renewal is so high, we’ve looked at some of the reasons:
- Introductory prices or discounts have ended Insurers often offer cheaper prices or discounts to new customers to encourage them to take policy. They expect many people will stay with them at renewal even if the price increases so customers often see a jump in their premium after the first year of cover.
- You’ve made a claim If you make a claim for an accident you caused, insurers believe you are more likely to cause another one. In insurance terminology, you’re a greater risk. This means they may increase your premium at renewal to reflect the possibility of another payout.
- The insurer’s costs have increased Insurers want to continue to be viable (and profitable) businesses so they may pass some legitimate costs on to customers. These could be an increase in insurance premium tax or higher staff costs.
- Changes to your information Factors such as where you live and the model of your car affect your premium so if you update your details at renewal your price may increase.
Unfortunately, insurers rarely reward loyalty so some companies do see renewals as an opportunity to increase prices to make more money.
This is not always the case and prices can go down as you gain more experience as a driver but if you do think an increase is unfair it’s worth shopping around.
Find out how much the average car insurance policy costs.
Car insurance renewal refund
If you cancel your policy after renewal you should receive a refund of the premium you have not used. For example, if you pay monthly and cancel after a week you may be paid back the rest of the month’s premium.
If you paid for the full year in advance your refund would be much larger.
There may be fees if you cancel a policy after renewal that are taken out of your refund. And there may be limits on the refund you can receive.
If you think the cost of cancelling a car insurance policy is too high the Financial Ombudsman may consider your case and ask the insurer to refund some fees.
Find out how companies handle renewals
Many people ask about how different companies handle renewals. It’s often best to visit their sites or ask them directly.
Here are some of the most common companies people ask about:
- Direct Line
- Compare the market
- Kwik Fit no longer offers car insurance to new customers but Ageas, the company behind Kwik Fit's cover, will continue to pay claims and offer renewals. If you do renew, your policy will be managed from a different office. It means your renewal letter may come from Ageas, rather than Kwik Fit.