Renewing a Policy on Time

Renewing a policy on time is not only an indication for the insurance agent of a customer's sense of responsibility, but it may sometimes actually earn the customer a discount, and it could certainly save the customer much time and money. It is immensely important to renew insurance policies on time. Once the date of renewal has passed they are no longer valid and any claims filed for an incident occurring after that date will typically not be honored by the carrier.

There are some carriers, however, who allow a grace period of a few days, especially for their customers of long standing, but it is never a good idea to bank on this, especially for new drivers. Failing to renew a motor vehicle policy on time can work against the customer in so many ways. Some agencies will insist on negotiating an entirely new policy once the date has passed, and will not give credit for length of relationship. For example, if the customer would have been due for a discounted premium as a reward for having been a customer for, let's say five years, but had allowed the coverage to lapse, the carrier might well deny that person the expected discount.

If an accident were to occur two days after the policy was allowed to lapse, the customer would not be covered, and if it were a case of serious physical injury that could result in considerable financial or legal challenges the now uninsured motorist would be left to resolve them from personal sources of funds. This would be undesirable even if those funds were easily available.

If a customer chooses to not renew a policy, it is necessary that he or she inform the agent before the term ends, preferably formally in writing or by filling out a form that the carrier makes available for that purpose. Otherwise, if the insurance were simply not renewed, especially if the company issued notice of the due date, it might choose to record the non-renewal as a dismissal for non-payment. Another insurance carrier would not look favorably on a situation where insurance coverage appeared to have been withdrawn for lack of payment and the car insurance rates quoted would reflect that.

Avoiding a Lapse

It is, in any case, easy to succeed at renewing an automobile insurance policy on time with a little organization and advance planning. Whether the customer chose to pay the premium annually, quarterly, bi-annually, or monthly, it would be wise to arrange direct bill payment through the bank or credit card. If the customer would rather not do that, then the next best thing would probably be to request that the agent send reminders. Some carriers will charge a fee for this because they wish to discourage paper billing and extra handling in these days when so much business is done on the web. If reminders are requested, they must unerringly be honored.

In all cases, the customer should note the dates on personal calendars one year out, and make sure they are kept in a place where they will be easily noticed.

When it is time to renew the policy, the customer should always review the old policy before speaking with the agent, and note any areas in which there might be need for change. The customer should ask for new auto insurance quotes, discuss new deductibles and limits, and ask about discounts for which he or she might be eligible. If the driver makes sure they're always renewing a policy on time, it could be beneficial in the discounts and agent goodwill that accrue, and possibly entirely new, more attractive car insurance rates.


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