Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Nov 6, 2020

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Here's what you need to know...

  • The incidents and claim rates reported in your neighborhood will have an affect on rates
  • A chargeable claim is an at-fault incident where you were at least 51 percent at fault
  • If an insurer does a renewal too early, they may not be able to charge for risks

A standard car insurance policy will renew on a 6 or 12-month basis. When a policy is up for renewal, new rates are calculated and a new declarations page is sent to the insured for review.

While every company has their own timelines, the standard carrier will begin to schedule policies for renewal about 60 days before the term is set to expire.

Depending on how long the process takes, you can expect to receive documentation that notifies you how much your premiums will be about 30 to 45 days before the term’s expiration.

Budgeting can be tough when you are not given the opportunity to renew early, but there are other options. Read this guide to car insurance renewals, and find out what the alternatives are to an early renewal.

Start comparing car insurance now! Enter your zip code above to get started!

Why is a car insurance renewal so important to the insurer?


A car insurance renewal probably matters more to your insurer than it does to you. The main purpose of a renewal is for the company to reassess the risk that they took on the year prior.

When you initially applied for coverage, you qualified for insurance based on your driving record, claims record, and other factors that go into the underwriting process.

Since high-risk drivers need to be charged high-risk premiums in order for the insurer to break even, the insurer looks forward to the time when they can assess the risk in the household.

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When Your Rates Can Change

There are only a few scenarios when an insurer is legally allowed to change your insurance rates.

When you initially apply for your insurance, the company has the right to underwrite the risk so that they can verify that the picture that you are painting matches the truth.

The company cannot change a rate for any other reason other than non-payment until renewal.

Since it can take time for the truth to be uncovered, the insurer can either change the rates or choose to drop the policy entirely within 60 days of issuance.

The only time rates can change is when the policyholder elects to make changes to add cars, drivers or coverage.

What factors can increase your rates at renewal?


There is a long list of different reasons why an insurer might issue a rate increase from one term to the next.

In most cases, when premiums go up during a renewal, it will signify that the policyholder or someone in the household presents more of a risk.

Some might assume that you need to have a violation or a claim just to see a rate hike, but that is not always that case. In some cases, renewal rates can go up just because of a company-wide rate increase.

Here are some common reasons why your policy might be considered riskier:

You File a Claim

One of the most common reasons why your rates will be surcharged is when you file a claim that is classified as chargeable.

A chargeable claim is an at-fault incident where you were at least 51 percent at fault.

Claims do not affect rates until they are closed. If a claim is still being investigated when your policy is up for renewal, the rates will not change until the next renewal.

You Are Convicted or a Moving Violation

When you are cited for a moving violation, you have the option to go to court to contest the ticket.

What many people do not know is that a violation can only be chargeable when you are convicted.

Once you are convicted, your rate increase will depend on your driving record as a whole and if it was a minor or major infraction.

Even a minor infraction can lead to an increase of 15 percent when you are classified as an average risk and you are cited for failure to stop.

You Moved or Your Neighborhood Becomes Riskier

The incidents and claim rates reported in your neighborhood will have an affect on rates.

The claims records are reviewed annually and if the claims reported have jumped, your zip code could be a higher risk. It’s a good idea to review the neighborhood’s crime rates and other specifications before you move.

Your Driving Experience

Insurers do not just look at age, they also look at your years of driving experience. As you get older, you will receive a bigger credit for your driving experience.

This credit might not benefit you as much as it would if you have claims or tickets that show that defensive driving is not your strong suit.

Why Insurers Prefer to Renew Policies As Late As Possible

All carriers have a schedule that they will adhere to, and the schedule allows the policy to be reviewed as close to the term as possible.

This is because it allows time for a citation to turn into a conviction or a claim to close after it is investigated.

If the insurer does a renewal too early, they may not be able to charge for risks.

If you want to renew early, you can look for a policy in the middle of your term with another carrier. Be sure to compare the rates, select an effective date that works, and avoid an increase for as long as possible.

Start comparing insurance rates now! Enter your zip code below to get started!


  1. https://www.thebalance.com/what-is-an-insurance-renewal-527419
  2. https://www.360financialliteracy.org/Topics/Insurance/Cars-and-Auto-Insurance/How-Automobile-Insurance-Premiums-Are-Determined
  3. https://www.thebalance.com/what-is-a-high-risk-driver-527253
  4. https://www.allstate.com/auto-insurance.aspx
  5. https://www.forbes.com/sites/jimgorzelany/2012/05/17/how-moving-violations-jack-up-your-auto-insurance-rates/
  6. https://www.geico.com/claims/claimsprocess/accident-impact-on-rate/