New year, new policy: 3 ways to clean up your auto insurance before it renews

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As we roll into yet another year, it’s the perfect time to reset, refresh, and realign with your goals. Why not take the time to look at your auto insurance policy to see if it still aligns with your requirements and is offering the coverage you need? 

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A lot can happen over one year. Perhaps you’ve moved from the city to the suburbs and aren’t commuting to work anymore, or maybe your teenager is off to university and no longer using your car. Or maybe your car insurance is proving to be too expensive and you’re looking for a lower rate. Auto insurance policies have a one-year term, and the best time to take a closer look at your policy is when it is up for renewal. 

By reconsidering your requirements and eliminating coverage that is no longer required, you could potentially save hundreds of dollars. 

What happens when you renew your auto insurance policy? 

At the time of renewal, you will receive a notice from your insurance company with the renewed policy information, which includes the terms of the new policy. Most people opt for the auto-renew option and may not be aware that you can switch insurance providers to get a better rate. 

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Renewal is a great time to review your policy and if you decide to switch providers, you’ll also benefit from not having to pay the cancellation fee that you’d otherwise pay if you broke your car insurance contract midway through its term. 

Depending on several factors, your auto insurance premium might increase, decrease, or stay the same when it comes time to renew. Approved rate increases or decreases are one reason you might see a change in your premium. Increased claim costs, market fluctuations, and increased cost of vehicle parts are just some of the reasons why an insurance company may raise their rates. 

Or you might have gotten a traffic ticket. Depending on the severity of the offence, your premium can increase significantly. By shopping the market, you might be able to find a lower car insurance rate with another insurance company who is surcharging that ticket differently. If you’ve missed making payments on your insurance policy, the insurance company can cancel your policy at renewal, and you’ll be forced to look for another provider. Be warned, however, that a policy cancellation from one provider is likely to result in a higher rate with other providers, since that non-payment cancellation goes on your insurance record.  

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What should you consider when renewing your car insurance?  

When renewing your car insurance this year, here are some things you should consider:  

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Lastly, check with your insurance company about any discounts and rebates you may be eligible for. For instance, many insurance companies offer a discount of up to 30 per cent by switching to a usage-based car insurance model if you consistently maintain safe driving habits. Or if you have a zero-emission vehicle, you may be eligible for a green wheel discount on your auto insurance policy. 

Cleaning up your insurance policy can be as simple as speaking with your auto insurance broker or agent. Or if you intend to switch providers, compare car insurance rates across multiple insurance companies to see the lowest prices.

LowestRates.ca is a free and independent rate comparison website that allows Canadians to compare rates for various financial products, like auto and home insurance, mortgages, and credit cards.