Here is what you need to know about renewing your Insurance Policy.
Insurance policies can lapse if you don’t pay your premiums on time.
But why would you do that? Well to be fair, no one does that deliberately. Maybe you forgot the date and it passed, or you spent too much on grocery one month and couldn’t pay your premium, or your budgeting went a little out of control and now you don’t have money.
Whatever the case scenario, the insurance company will give you a grace period of 10-20 days to arrange for your premiums and pay them; and if you somehow miss that grace period as well, bad news: your insurance policy will be cancelled.
If that happens, don’t lose heart. You can apply for the policy to be reinstated. But there are some policies that require an annual renewal by nature.
Renewing Insurance Policy
Renewing your insurance policy isn’t as complicated these days, but of course it is an added hassle that you would have been able to avoid if you had paid your premiums on time. Or if the policy requires annual renewal, chances are that your insurer will inform you two weeks prior to when the policy is expiring.
If you want to continue being insured under the policy, you can simply keep paying your premiums. If you don’t want to, you have the option of surrendering your policy altogether, of course that way you will be required to pay a fee.
When you get a policy renewed, there are chances that your premiums may spike. That is part of the insurance plan that your company should tell you right in the start. So don’t worry if you find yourself paying higher premiums after the policy is renewed; it’s completely normal.
But, a lapse in policy isn’t the only reason you get it renewed. There are certain times when you would want to renew a policy:
- Change in address: It is important for you to ask your insurer if the change in address would affect your premiums because sometimes geography does matter when it comes to the kind of policy plan and the premiums that were initially decided on the policy.
- Change in marital status: You might want to get your spouse insured now, and maybe your insurer could give you a discount on your existing policy if your spouse were to also get insured from the same company.
- Change in car insurance: If you have recently started using your car for commercial purposes like deliveries or driving an Uber, you will be insured under commercial auto insurance which will change the premiums you paid initially.
- At the end of the financial year: Like i mentioned above, most insurance policies do need renewal after the end of the year and could include a renewal fee and higher premiums.
Like a responsible citizen, you should be informing your insurance company for any of these changes. Policies can be renewed by either writing an insurance renewal letter or calling the company’s helpline.
Car Insurance Renewal
Do you know it is actually illegal to be driving without insurance? And if you’re caught, not only will you be liable to pay a fine but your driving license could also be confiscated by the State.
Auto insurance policy gives financial protection to your vehicle if it is damaged in any accident or theft. If your car is insured, the insurance company will cover all expenses related to repair of your car and even medical expenses if you’re injured in an accident.
If your policy has lapsed because you didn’t pay due premiums on time, you should be applying for a renewal as soon as possible!
If you want to get your auto insured again, you have the option of choosing another insurance company if you weren’t too satisfied with the previous one.
According to The Balance, they charge a minimum fee of $10 for renewal, but the premiums could be higher than you were originally charged for.
If your insurance policy has lapsed for two weeks only and you want to get it renewed within those two weeks, you can be renewed in less time. But if your previous auto insurance policy was cancelled and it has been almost six months or a year to that, you will have to start off again. Which means submitting an application again, sending your documents again and this time maybe you will be charged higher premiums.
Now that you know that the premiums will be higher, there are still ways that you can reduce those rates.
- Point blank ask for discounts that you may be eligible for
- Decrease your overall coverage
- Increase your deductibles
- Shop around for inexpensive insurance policies
This time when your policy is renewed, JUST DON’T MISS THE DATE! If your insurance policy is cancelled again, it could actually affect negatively on your record and you may find it harder to even qualify for an insurance next time.
The Final Word
The whole point of insurance is to have that financial backup in case something were to happen to you or your vehicle. In both cases- life insurance and auto insurance- it is important that you fix a date with your insurance company beforehand, and make sure you remember it.
Of course many companies do give a grace period of a couple of days which is enough for you to arrange a premium by taking a small loan from a friend or family- that’s still better than having the whole policy lapse which could have you go through the whole renewal process. And besides, driving an uninsured car is illegal and may invite so many other consequences which you might want to avoid.
Even though renewals have been made relatively easier through online methods or by applying through call, it is still an added tension to go and apply from scratch. A piece of advice? Set an alarm on your phone one day prior to the premium date; this way you will never forget paying and in case you don’t have money, you can ask for a friend to lend you the small amount to pay.