Can my car insurance automatically renew?

Most auto insurance companies allow you to set up automatically drafted payments. Compare rates from different companies online to save up to $859.

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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 insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 15, 2021

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Here's what you need to know...

  • Technically, auto insurance continues each month that you pay the premiums
  • Some renewal scenarios are dependent on you making manual payments each month
  • Most insurance companies allow you to set up automatically drafted payments
  • Auto insurance companies often offer several payment options for automatic renewal

When shopping for car insurance, some people want to know if their coverage will automatically renew.

It is important to know whether your auto insurance will automatically renew because you don’t want to have to worry about having a gap in your coverage.

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How to Determine if Your Insurance Automatically Renews

The best way to determine if your insurance automatically renews is to ask your car insurance agent when you shop for a policy.

If automatic renewal is important to you, you will want to find an insurance carrier that offers it explicitly. However, you will find that the majority of insurance carriers do operate on a month-by-month basis. In other words, it will automatically renew each month, provided you pay the premiums due.

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Setting Up Automatic Bank Draft

Even if the insurance provider you choose does not automatically renew your policy each month without your check or online payment, you can set up an automatic bank draft and have the bank do this for you.

You usually also have the option of putting a credit card or debit card on the policy as well. Whatever card you choose will automatically be debited from your bank or credit account on the day it is due.

Some insurance companies offer some reduction in premium for setting up an automatic draft. Check around and compare the various policies and companies to see if this is available and if you can get a discount for creating an automatic payment plan with your policy.

For car insurance, an entire premium period is considered six months. In others words, when you first join a car insurance plan, you will be given the option to pay for the entire six months in advance (at a slightly reduced rate) or to pay for it in monthly installments (due each month at the same time).

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Advantages of Automatic Renewal

Here are some of the reasons you should consider doing this:

  • You don’t have to worry about coverage as long as you have the money in your account to cover the premiums. Whether you pay yearly, monthly, or quarterly, having your policy on auto renewal is comforting in that you know that your policy will always be in force.
  • If you have your policy on automatic renewal, it provides proof that you made an attempt to pay your premium if there is ever a legal dispute surrounding this. Insurance companies are required to let you know if your policy is in danger of lapsing or if your policy is canceled for any reason.
  • It frees up your time and energy for other things. One of the most exhaustive things we have to keep up with is paying bills. By putting your auto policy on automatic renewal or bank draft, you take the focus out of trying to remember to pay the bill and it happens automatically each month.

Ask Questions

Sometimes when shopping for an auto insurance policy, people ask questions about the coverage but they sometimes forget to ask how it will be paid for, how often it will be deducted, and how much it will cost.

If the agent you speak with does not volunteer this information, it is in your best interest to get this cleared up before finalizing the policy.

Insurance agents get busy explaining the policy and, while they are required to tell you how the payment will work, sometimes it gets lost in the policy details.

Asking the right questions is a key ingredient to making sure you get the policy you need, setting up a reliable payment plan that you know will ensure that your insurance coverage continues, and covering all of the basis of your policy before you sign on the bottom line.

So, as you shop for car insurance, don’t forget the payment methods the company offers and set up an automatic renewal plan according to the terms that will work best for you.

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