We have come to accept that car insurance is a fact of life. While necessary, the process of renewing your car insurance can sometimes be confusing.
The standard for all major insurance carriers is to write automobile insurance policies with six month policy periods. This is done to allow the company to reassess risk on a regular basis and to keep insurance affordable. At the end of every six month policy period, you will need to renew your policy. You may occasionally run into a carrier that will write an auto policy with a twelve month policy period. The procedures you will go through to renew the policy do not change with the increased policy period. Follow these steps to renew your policy.
- About a month before your current policy expires, you will receive a renewal notice from your carrier by mail. If you have not had any accidents, moving violations or changes in drivers, you should be automatically set for renewal for the next six months. However, as a prudent consumer, there are some steps you should take prior to completing your renewal.
- Review the renewal notice for any changes in premium (the amount you pay for insurance). There may be changes due to a change in your risk. Risk is the probability determined by the insurance carrier that you will have a claim in the next six months. Risk can be impacted by driving record, age, zip code (whether you are a rural or city driver), accident or moving violation history. Your premiums may also be impacted by market conditions, whether your carrier has reassessed its rating system, and whether your premiums have been adjusted based upon what other carriers are doing. You may see an increase or decrease in premium based upon these factors.
- Perhaps the most important thing you can do is to confirm that all coverages you wish to be paying for are listed on the renewal. Common coverages on your auto policy are Comprehensive, Collision, Liability, Rental Reimbursement and Medical Payment Coverages.
- Determine if the deductible (amount you are responsible for on each claim) is appropriate for your household. Deductibles usually range from $250 to $1,000 per claim. A higher deductible will lower your premiums, but you will have a higher financial responsibility in the event of a loss. Conversely, a lower deductible will cost you more each policy period, but will have a smaller financial impact on your pocketbook in the event of a loss.
- Make sure that everyone who drives the listed vehicles are listed on the policy. If you have drivers in the home who are not on the policy, you may be jeopardizing coverage if they are involved in an accident.
If you determine that changes need to be made, contact your insurance agent immediately and discuss the changes. Once you are happy with the renewal, you will simply need to pay your premium as dictated by your insurance company. Once your premium has been paid, your policy will be renewed for the next six months.