When does my car insurance expire?

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Things to Remember...
  • Standard personal auto insurance policies will last for either a 6-month term or a 12-month term
  • On the declarations page of your policy, you will find the duration of the term, the effective date, and the expiration date
  • When the policy approaches expiration, the insurer will reassess the risk to determine whether or not the company wants to send a renewal offer
  • Instead of allowing the policy to expire on the expiration date, some companies offer clients the option for an automatic renewal with an automatic draft payment arrangement
  • If the household has several losses, citations or new risky drivers, the company may send notice that the policy has been set up for non-renewal

Driving around with an expired insurance policy could turn into your worst nightmare. Not only do you have a false sense of security in thinking you’re protected, but you’ve also been breaking the law and putting yourself at risk each time you step behind the wheel.

Unfortunately, hundreds upon hundreds of car insurance policies expire on a daily basis simply because policy owners don’t understand how renewals work. To avoid this situation, it’s important to prepare ahead.

Not only should you learn when a policy expires, but you should also learn how to locate the information in your policy so that you’re able to look up your expiration date at any given time. Once you’re familiar with how standard policies are structured, you can be prepared.

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What’s a car insurance term?

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Car insurance policies don’t last forever. Just like an auto loan has a fixed term, so does an auto policy. The main difference between these two terms is their duration.

In the standard car insurance marketplace, insurers offer terms that last for either six months at a time or 12 months at a time. During that time, you as a policyholder are obligated to pay your premiums and keep your license active.

As long as you fulfill your end of the bargain, the insurer must provide you with protection for covered losses under the coverage options that you carry under your declarations page.

The company can’t legally run your record or change your risk class because of convictions or accidents within the term until the policy is up for renewal.

Should you choose a 6-month or 12-month term?

More and more insurance companies are eliminating their 12-month terms because of the advantages that they present to the policyholder.

Even so, there are still some big names in the industry that offer 12-month terms.

If you’re interested in learning about some of the benefits that 12-month terms offer you, here are just a few of them:

  • Your policy will only be up for expiration once every year, so you have less of a chance of overlooking your renewal date
  • If you have an at-fault accident early in your term, your insurer can’t charge for it until your renewal
  • You can avoid surcharges for moving violation convictions for longer and keep your low guaranteed rate
  • You’re still eligible to set up payment plans to pay by the month, by quarter, twice per year or in full

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What is an insurance declarations page?

If you have an existing policy and you don’t have a clue how long your term is, you can easily locate all of this information by pulling out your auto insurance declaration page.

The declarations page, or “dec page” as many people call it, is the most important document that you’ll receive when your policy is issued. It breaks down all of the policy-specific information that you’ll need to know when you buy insurance from a carrier.

Here’s some information you’ll find on your declarations page:

  • Named insured and insured mailing address
  • The duration of the term
  • The effective date of the policy and the expiration date
  • Policy number through the carrier
  • Covered vehicle and VIN
  • Types of coverage you’ve elected to carry on each vehicle
  • Costs of coverage for each section of the policy
  • Policy discounts applied
  • Total premium or rate of the policy for the term

What happens when your auto insurance policy is nearing expiration?

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You should never just assume that your policy will automatically renew. While some policies do, more often than not, the carrier expects you to take action at renewal time to keep your coverage. When your policy is approaching expiration, the company will start the renewal process.

Your policy will officially renew on the expiration date listed on your declarations page only if you’re eligible and are extended an offer by your insurer.

During this time, the company is free to run your credit report, your Motor Vehicle Report, your C.L.U.E history report and other underwriting reports to reassess risk and to determine if the company should charge you a higher rate.

At this time, the insurer can also charge you new rates if they’ve been raised and approved by the department of insurance, or if they find something that deems you to be at a higher risk.

How much notice will you receive if your rates change?

In most states, insurance companies are required to give their policyholders a reasonable amount of notice when a policy is about to renew and new premiums are about to be changed.

While the actual requirements vary by state, most companies start to run the reports and send out new invoices about 30 to 45 days before the expiration date.

If it’s been decided that you’re too much of a risk, the company may send a non-renewal notice several days before expiration.

You can set up automatic payments, and most policies will renew automatically unless you request otherwise. Be sure to verify that the carrier’s insurance works this way before you make hasty assumptions.

If you’ve received a renewal notice and you’re not happy with your premiums, it’s time to exercise your right to shop the market by comparison shopping. Use an online rate comparison tool and enter the information from your declarations page to find instant auto quotes in minutes.

Once you’ve seen what the competition will charge, you can decide if you want to defect or stay. Get started comparing insurance rates now by using our tool below!

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