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Your Auto-Renewal May Be Costing You Money

Dec. 7, 2021
3 mins
A woman tracks her finances with a notebook and phone

Everything seems to be just a little bit easier to do these days. You can order a package to be delivered to your doorstep by the next day, speak to the TV to change channels, and send messages in an instant. So, it’s no wonder convenience calls your name.

Renewing your car insurance policy is no different. It is easy to check the auto-renew box and keep on paying your premium. Yet, even small changes to your driving history, your living situation, or the vehicle you drive can determine the insurance premium you’ll pay.

By checking the box to auto-renew your insurance policy, you may be skipping the opportunity to compare quotes. Many factors dictate your rate, and every year they can change. The insurance provider that offered you the ideal rate last year may not be offering the lowest rate this year. So, in the end, this convenient option may be costing you money.

It is a good idea to compare rates at least one month before renewal. But you aren’t limited to your insurance anniversary. Whether you’re getting married or moving, life changes can affect your insurance premium.

Getting married

Living with your significant other or getting married can change your insurance rate, especially if your partner has a poor driving history. Many insurance providers offer a multi-vehicle discount to customers with more than one vehicle listed on a policy. However, your current insurance provider may not offer you the lowest rate for your new circumstances. Shopping around can ensure you find the best rate.

Moving away

Moving to a new town or city can influence your insurance rate in more ways than one.

  1. Your address: Your insurance premium may be affected by the population density of the area. Claims costs are typically higher in urban areas that are at higher risk of collisions and thefts. This generally means higher premiums. At the same time, the opposite can be said about rural areas.
  2. Driving distance: Moving to a new location may decrease the number of kilometres it takes to get to work. If your regular commute is shorter, you lower your risk of getting into a collision. This would also apply to those choosing to take transit more frequently or retirees who get to skip the commute altogether.

Adding a young driver to your policy

You may have loads of experience behind the wheel, but your teenager most likely doesn’t. Therefore, adding a young driver to your insurance policy may increase your premium. Some insurance providers, however, are more optimistic about young drivers than others, so you may be able to find a better rate.

Buying a new vehicle

Every year, new cars gain technology that’s more advanced than the models before. But more gadgets and luxuries typically indicate a higher value and replacement cost. Considering this, your insurance provider may charge more to insure your vehicle. So, it’s a good idea to compare auto insurance quotes to get the best coverage at the best price.

You may also consider adding collision and comprehensive coverage to your policy. These optional coverages protect you from insured perils like theft, vandalism, hail, and a variety of collisions. As your vehicle ages and loses its value, you can consider whether or not you still need the added coverage.

Compare auto insurance rates

Do yourself a favour and compare auto insurance quotes before you renew. Although you are entitled to switch insurance companies at any time, you may have to pay a penalty if you choose to leave before your contract is up.

Before you get hooked back in by your auto-renewal, compare quotes at RATESDOTCA.

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Hayley Vesh

Hayley Vesh is a creative, resourceful, and knowledgeable content producer who is passionate about financial literacy, storytelling, and generating ideas. She writes about credit cards, savings, debt management, and personal finance. In her spare time, Hayley can be found wandering in the woods, hunting for second-hand treasures, or curled up with a steeped tea and a good podcast.

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