Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Oct 30, 2020

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A policy renewal is simply the continuation of set and terms and conditions under an existing policy, in a similar policy usually but not always with an increase in premium to accompany the renewal.renewal

For US auto insurance policies, it is common for policies to automatically renew unless the policyholder informs their insurance company in advance that they do not wish to continue coverage. In this instance, the insurance company will normally issue a new policy upon taking the first payment due under the policy without the insured party having to take any specific action to continue their insurance.

What are the advantages of having an automatic policy renewal for my insurance?

The advantage of automatic policy renewal for your insurance is that you don’t have to worry about your car or vehicle ever being uninsured as long as you have funds to make the initial premium available with your bank or credit card then your insurer can continue to provide the same level of coverage that they always have without you making any additional effort to renew your policy or having to find another suitable policy.

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Is my policy renewal automatic for my car insurance policy?

Without seeing a copy of your contract it is impossible to tell whether your policy will automatically renew or not. The only way to be certain is for you to check the terms and conditions detailed in the insurance policy contract you will have received from your insurer when you originally took out the policy. If you’re not sure whether or not your policy will automatically renew after you have checked the contract then you should contact your insurance agent or broker and ask them, it’s in their interest for your policy to automatically renew so if your policy doesn’t cover this they’ll be certain to arrange it.

Will my policy renewal always require an increase in premium?

While there are “renewal discounts” out there, for auto insurance policies it is likely that every renewal will see an increase in premium payments, this is because insurance companies have to cover the increased (inflationary) expense of running and managing their businesses each year. If your insurer didn’t raise the premiums every year for policyholders then while it would first seem like a very good deal for policyholders eventually the insurance company wouldn’t be able to meet its obligations to pay claims and it would become insolvent.