There is an allure to signing up for auto-renewing car insurance – as a “set it and forget it” deal, consumers do not need to worry about the laborious process of manually renewing their coverage. In fact, a recent survey conducted by Ratehub.ca found that 64% of Canadians said they allow their coverage to automatically renew.
But consumers risk missing out on huge savings if they opt for auto-renewal, a new guide by Insurance Business’ Mark Rosanes has warned. While some insurers do offer rewards for their most loyal customers, drivers can still save more if they shop around for better deals, the guide advises.
But apart from missing out on potential savings, why should drivers opt out of auto-renewing car insurance? Here are some additional considerations Rosanes has listed in his guide:
Drivers may no longer have the coverage they need
Some protections in an insurance policy may have an expiration date that may not be automatically carried upon renewal or may get more expensive after a certain number of years.
The driver’s circumstances may have changed
Renewals are also a good time for policyholders to advise their insurance providers of any changes to their personal information, which could impact their premiums. This may include their place of residence, occupation, and driving patterns.
Car insurance rates change frequently
Auto insurance rates change every quarter, as noted by Ratehub.ca, for “reasons that have nothing to do with your driving, and all to do with their risk tolerance.”
In addition to these, drivers may want to better understand how their rates are calculated, so that they can make better decisions when shopping around. In a recent poll, the Financial Services Regulatory Authority of Ontario found that only 27% of Ontario drivers have shopped around for auto insurance in the past year. The same survey also found that only 6% of people are very familiar with the way their auto insurance rate is calculated, while 38% said they are somewhat familiar.