How does car insurance renewal work?

When you buy a car insurance policy, the insurance provider makes an assessment of your insurance risk. They look at factors like your age, where you live, what kind of car you want to insure, what level of cover you want and how many miles you’ll drive a year. Based on their risk assessment, they’ll offer you a specific price for your policy.

Most car insurance policies last for one year. When your 12 month policy is close to ending, your insurance provider will reassess your insurance risk. They will take into account any changes, such as if you’ve moved house, changed jobs, or made any insurance claims in the previous year. They will then give you a new quote on your insurance.

Some insurance providers will offer to auto-renew your policy, but although this can make your life a little easier, this isn’t recommended. Your insurance provider may charge you over-the-odds for your policy, and you might be able to get a better deal if you shop around.

When is the cheapest time to renew car insurance?

The best time to renew your car insurance is generally two to four weeks before your policy renewal date^[1]. It’s advised to renew your insurance as early as possible, to avoid your cover running out and facing the risk of accidentally driving without any insurance protection and breaking the law[2].

It’s also worth noting that car insurance premiums can actually get more expensive the longer you wait to renew your policy^[3].

It’s highly recommended to shop around to compare a range of car insurance quotes before you reach your renewal date, as car insurance providers can increase the price of your insurance, even if your circumstances haven’t changed. Insurance providers typically look for opportunities to raise prices, and you could find your policy costs you more than it should.

In some cases, your circumstances will change – you may have made a claim in the previous year or your insurance provider decides customers with your profile are a greater risk and will raise the price of your policy for these reasons.

Either way, it’s sensible to shop around for your car insurance, in case a different insurance provider will offer you a better price.

Does car insurance automatically renew?

A lot of insurers will auto-renew your insurance policy so you don’t end up driving without cover. If you’d prefer to shop around for a new deal when your policy is up, put a reminder in your calendar one month before your renewal date so you don’t miss the chance to find a cheaper price on your insurance.

Should I auto renew my insurance?

UK insurance providers are legally allowed to automatically renew your insurance provided they inform you beforehand. In some cases, you may be charged more for your next year of insurance even if nothing in your policy has changed.

Automatic renewal can seem like the easiest option, as it removes the hassle of having to spend time comparing quotes and shopping around for car insurance, but you could be missing out on savings if you do auto renew.

Why does the cost of car insurance often increase at renewal?

When it comes time to renew your car insurance, your existing car insurance provider will often charge you a higher price for another year of cover. This can happen for a variety of reasons, including:

• You made a claim on your insurance policy, losing your no claims discount, and making you appear a greater insurance risk for insurance companies.

• Your personal circumstances have changed – including moving house to a riskier area, parking on the road rather than off, or driving more miles – which can make you a greater insurance risk.

• Your insurance provider views customers with profiles like yours as riskier to insure.

• Changing market conditions that cause insurance companies to raise prices across all their insurance products.

Car insurance made simple

Insurance can be complicated and daunting, but at Asda Money, we aim to make vehicle insurance easy to understand. Find out more about car insurance on our car and motor blog.

Easy shopping around for car insurance with Asda Money

You can often find a better deal on your car insurance if you switch when you reach your policy renewal date.

With Asda Money, you can compare insurance quotes from over 60 of the UK’s top insurance providers – including Admiral, Hastings, Avia, and others – to find the right policy for you. The car insurance comparison service is provided by Vast Visibility Limited.

All you need to do is fill-in a simple online form. You’ll see your quotes in a list that makes them easy to compare, with the cheapest car insurance policies at the top. You can buy your policy online and be covered in no time at all.

Compare car insurance quotes today

[1] https://www.independent.co.uk/advisor/car-insurance/best-time-to-renew-car-insurance

[2] https://www.gov.uk/vehicle-insurance/driving-without-insurance

[3] https://www.independent.co.uk/advisor/car-insurance/best-time-to-renew-car-insurance