What you need to know about old car insurance renewal

While most drivers allow their insurance to automatically renew, we see this as a wasted opportunity. By taking an active role in the old car insurance policy renewal process, drivers can reassess their needs and save money.

Why drivers should take action

A 2016 survey conducted by EKOS Research Associates for the Financial Services Commission of Ontario, shows that when it came time to discuss renewing their old car insurance policy, 52% of Ontarians allowed their current policy to renew automatically by paying their premium and taking no further actions. An additional 16% had no memory of whether they’d acted during their prior renewal.

The Ontario insurance industry is now regulated by the Financial Services Regulatory Authority of Ontario, but in 2022  Insurance Business Canada reported that the majority of Canadians still allow their car insurance policies to auto-renew. Moreover, 26% of Canadians don’t review their policy before it renews.

In part, this is because drivers aren’t necessarily aware that they needn’t let their old car insurance policy renewal be automatic. Whether you live in Ontario or Alberta – the two districts covered in this article – you’re under no obligation to stay with your current insurer. You’re also free to cancel your policy with them when it comes to renewal time.

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How can drivers cancel their old car insurance policy?

To cancel your old car insurance policy, you have to provide a written, signed request to cancel a policy whether it be mid-term or at your renewal date.

As a rule, your insurance provider should send you a renewal notice 30 to 60 days prior to your policy’s expiration date. This gives you ample time to shop around and get a better deal. Documents are provided to clients 1 to 2 months in advance of their renewal date because if you have a monthly payment plan, you are paying 1 month in advance for your premium.

Keep in mind that Insurers appreciate knowing that you’re going to be a long-term client and may give you access to loyalty discounts. Before you decide to switch insurance providers; check to see if you are getting a loyalty discount from your current insurer. Car insurance companies are in the business of retaining customers and providing long-term coverage. So, if you are entitled to one, a loyalty discount will be applied to your renewal documents.

There are all sorts of reasons why you would need to update your old car insurance renewal policy. Perhaps you’ve increased your mileage, been in an accident in the last year, moved to a new location, or changed where you park your car overnight. ll of this information should be relayed to your current insurance provider or given to a new insurance company or broker when you get a new quote.

Here are some of the commonly asked questions we receive about old car insurance policy renewals…

Frequently Asked Questions (FAQs)

1. How do I renew my insurance and what will I need to consider?

Typically, the old car insurance policy renewal process begins when your insurer mails or emails you a letter and your renewal documents 30-60 days prior to your renewal date.

Thereafter, you’ll have a period in which you can review your new terms and premiums for the upcoming year. If you decide not to contact your insurance provider (either a company or a broker) to discuss a new plan, your previous plan will automatically renew, and your previously scheduled annual or monthly payments will continue.

Below is a list of the information you need to share with your insurer for an accurate auto insurance policy renewal:

Mailing address

You should always update your broker or insurance company with your current address when the change occurs. On renewal, your documents would be sent to the address on file, so if you have moved and not advised anyone, you may not receive your renewal information. Further, moving and not advising your insurer – could make your policy invalid.

There are many reasons why your address affects your car insurance. For one, you’ll often pay less if you live and work in the suburbs and not in a big city, which makes sense, right? The suburbs are less populated and (depending on your neighbourhood) traffic congestion, accidents and property crime tend to be less common.

So, if you move to a new town or province, your new insurance rate may be very different than your old one. If you’re paying more than you like, we recommend that you compare affordable rates by getting a free car insurance quote for your area. You could save up to 40% in premiums.

Contact information

Ensure your phone number and email address are up to date.

Vehicle type

There are many reasons why the vehicle you drive is such a significant part of the insurance payment equation. Certain vehicles are more prone to theft, are involved in more accidents, and can cost more to repair, and this will increase the cost of your insurance.

Vehicle usage

Depending on how you use your vehicle, it may be tricky to determine if it is for commercial or personal use and for pleasure or commuting. However, it should be easy for your insurance advisor to figure out whether a vehicle should be covered under a commercial auto policy rather than a personal policy. As a rule of thumb, if you change how you use your vehicle, for example, if your commute changes or you start working from home or driving for Uber, you should notify your insurer.

Car modifications

Many modifications will affect your car insurance, and generally, modifications tend to increase insurance premiums, especially if they increase the cost to repair or replace your vehicle. However, certain changes, like installing winter tires, do not adversely affect your premium if they are likely to decrease the risk of an accident or theft. However, any and all car modifications to your vehicle’s engine or physical appearance should be reported to your insurer.

New drivers

New driver costs will vary depending on where you live, who else is on your policy, and how long you’ve been driving. But generally, adding a new driver to a car insurance policy will cause your rates to go up. Let your insurer know of any new drivers in your home that will be using your vehicle.


According to a CarInsurance.com analysis of the impact of speeding tickets on insurance rates; your car insurance premium will go up 22% to 30%, on average, after a speeding ticket.

However, you do not have to notify your current carrier if you have gotten a ticket in the past year. Your current carrier does not pull a driving abstract annually, so you may never have to reveal you have received a ticket.  If you change insurers, the new insurer will definitely pull a driving abstract revealing any infractions you may have obtained.

2. Old car insurance renewal: What should I consider when renewing insurance for an older vehicle?

When considering your old car’s insurance renewal, it’s important to think about the current value of your ride, insurance providers call this its “actual cash value.” Many older vehicle owners choose to skip optional coverage like collision insurance and comprehensive coverage because they feel the depreciated value of their car isn’t worth the cost to insure it for repairs or replacement if it was lost or damaged in an accident.

For example, if your insurance company sets the actual cash value of your vehicle at $5,000 and your collision insurance deductible is $1,000, then you would receive a maximum of $4,000 to replace your vehicle if it was totalled in a collision. You should also consider how much your collision insurance increases your total insurance premium. If you could afford to replace your car without making a claim, then you may want to talk to your insurance representative about removing collision coverage when it’s time for your old car’s insurance renewal.

Learn more about the pros and cons of keeping collision insurance as part of your old car insurance renewal policy.

While depreciation is normally offset by rate changes upon policy renewal by insurers, luxury vehicles tend to hold their resale value more than regular automobiles. So, if your vehicle is older, but still fairly valuable due to its make, model or rarity, collision and comprehensive insurance are an important part of protecting your car and should be carefully considered as part of your old car insurance renewal.

In contrast, if your car is brand-new, you can talk with an insurance expert about adding a depreciation waiver to your auto insurance policy for the first 1 to 3 years of its life.

Unlike actual cash value, which reduces the replacement cost of your vehicle by depreciation, a depreciation waiver, will cover your car for either the full price you paid for it, its current list price or the list price of a similar vehicle.

3. How often should I shop for a new car insurance policy?

To avoid financial penalties for cancelling your policy mid-term, it’s best to consider your policy options by getting multiple quotes every time your policy is up for renewal. Even if you decide to stick with your current insurance provider, reviewing your policy options will give you the confidence of knowing you have the right coverage and price for your unique needs and circumstances.

Moreover, if you drive significantly less in the winter than in the summer, many insurance carriers can offer a low-mileage discount (particularly if you’ve recently moved to an area with public transportation and will drive fewer than 16 thousand kilometres per year). So, if the amount you drive fluctuates within the same year, it may be useful to have frequent insurance assessments.

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4. How long to keep insurance records?

Although you needn’t retain your insurance documents for longer than a year – in fact, once you have a new policy in hand, you can toss the old one – it’s important to know what does need to be retained (and kept accessible) during that one-year period:

  • Declaration page of Auto Insurance policy: The section of your Auto Insurance policy includes a summary of coverages and deductibles, in addition to your name and address. You need to keep this document until you receive an updated one.
  • Documents pertaining to a claim: Keep all the repair bills, receipts, and other paperwork related to any open claims.
  • Monthly billing statement: A slight amendment to the “one-year” rule is that, if you use your car for business purposes, you should keep your billing statements in case you are audited. During a CRA audit in Canada, you must show your bills for the last seven years.

If you lose your paperwork, you needn’t stress. Your insurance company will have all the copies related to your insurance and you can usually access them online. But you need to keep many documents safe with you. Keep your policy documents until you are sure there will be no more costs applied to the claim.

5. How do you properly dispose of old insurance policies?

As Bankrate notes, identity theft is a growing concern across the U.S. and Canada:

“Your policy documents may contain names and addresses, policy numbers and other personal data, and an enterprising thief may use them for personal gain if your documents are found intact. In general, you should always shred anything that has your name or identifying details on it.”

A small home shredder will do the trick. Some office stores offer shredding services, and local banks or companies offer free shredding days regularly for residents in many areas.

6. When should I cancel my old insurance policy renewal?

You can cancel your insurance policy at any time. To do so, you can mail, fax or email a letter to your insurance company stating a cancellation date. If you don’t mind calling in, you can speak with your broker directly. Just be sure to ask for details of the cancellation process and have them send any cancellation documents that need to be signed.

If you cancel your policy on the renewal date, there is no penalty. However, it’s important to note that most car insurance companies charge a significant cancellation fee depending on how long the policy has been in force in the term – so make sure you ask about this before submitting a cancellation letter.

Moreover, non-payment cancellation – which is what happens when you don’t pay your insurance – can adversely affect your credit record (and would likely render you a “high-risk driver” for which other insurers would likely charge a premium).

If you have any questions or concerns about your car insurance renewal, the aha insurance team is always here to help!

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