How to Renew Your Car Insurance
TL;DR: What you need to know about car insurance renewals
Your annual car insurance renewal is an opportunity to review your coverage and price and make any necessary changes. When your policy renews:
- Your insurer may raise or lower the price of coverage, make changes to the coverage you’re offered, or (in rare cases) cancel your policy
- You may raise or lower your deductible, adjust your optional coverage or coverage limits, purchase additional coverage, or switch to a different insurance company, provided you qualify
If your auto insurance coverage is provided in part or in full by a public insurance program, you’ll need to follow your province’s rules for car insurance renewal.
Does car insurance automatically renew in Canada?
Most Canadian car insurance policies auto-renew unless you miss a payment, change your payment information, or no longer qualify for coverage.
Your car insurance might not automatically renew if:
- You aren’t enrolled in autopay and fail to make a manual payment
- Your billing information is out of date
- Your insurer conducts a new risk analysis that shows you no longer qualify for coverage (e.g. due to too many at-fault accidents)
What to do when you receive your renewal notice
When your renewal package arrives, typically 30 to 60 days before your policy’s expiry date, set aside time to sit down and review your auto insurance policy. You may do this on your own or with the help of an insurance advisor.
You will have the option to either accept your renewal, make changes to your policy, or switch and cancel. If you do nothing, your policy will automatically renew.
Before you decide which action to take, you should:
- Review the terms of your updated policy. Compare your coverage, limits, deductibles, discounts, and premiums to your current policy and note any changes.
- Consider whether your insurance needs have changed. A new job, new car, or change in driving habits could change the type of insurance coverage you need. You may also want to add perks like roadside assistance to your policy.
- Request new car insurance quotes from other insurance providers. Car insurance rates change frequently and vary between providers. Comparing quotes for similar insurance products is the best way to ensure that you’re still paying the best price. If you own your home, take the time to compare bundled auto and home insurance quotes.
- Check to make sure your payment details are still current. If you plan to renew and are currently enrolled in autopay, make sure your credit card or bank account information is up to date.
If you’re happy with your renewal terms, you likely don’t need to do anything since most car insurance policies renew automatically. The only time it wouldn’t is if you call to cancel, miss a payment, or no longer qualify for coverage (for example, due to tickets, accidents, or misrepresentation).
If you’re satisfied that you’re getting the best price from your current insurer but want to adjust your coverage options, deductibles, or other policy details, contact your insurance company and request the change(s) before your renewal date.
We can help you shop around with other insurance companies to find the right coverage at the best price. Make sure that you’ve made the first payment and activated coverage on your new policy before cancellation.
Why your car insurance may have increased at renewal
It’s common to see your auto insurance premium increase at renewal. There are four main factors that typically cause this change: your personal insurance record, where you live, the vehicle you drive, and inflation.
In recent years, however, some Canadians have seen more significant rate increases due to the combined effects of the COVID-19 pandemic, an increase in extreme weather events, global conflict and tariff pressures, regulatory shifts, and new vehicle trends.
- COVID-19: Although the COVID-19 pandemic peaked half a decade ago, the insurance industry responded slowly to the economic havoc it wreaked. Lingering supply chain issues and inflationary pressures may still cause insurers to raise rates.
- Extreme weather: According to the Insurance Bureau of Canada (IBC), severe weather triggered property insurance claims worth over $2.4 billion across the nation in 2025. Insurers may raise rates to account for the rising toll of climate change.
- Global conflict and tariffs: Tariffs imposed by the U.S. government on Canadian steel and aluminum, along with Canadian counter-tariffs, are contributing to rate increases across the country.
- Regulatory shifts: Provincial governments regulate the insurance industry by approving or rejecting rate increases. In some cases, strict regulation may force some insurers out of the market in a given province, leading those that remain to raise their prices.
- Vehicle trends: Newer vehicles rely increasingly on high-tech systems for safety, security, and semi-autonomous driving, which raises the cost of repairs and property damage claims. Electric vehicles also carry higher repair costs.
Review your coverage before you renew
Before you accept your updated price and renew your car insurance, review the coverage you’re currently paying for to see if there are gaps or redundancies to correct.
Do you have enough liability protection?
Ontario only requires drivers to carry $200,000 of third-party liability coverage, but experts recommend carrying at least $2M to protect against ongoing legal costs in the event of a serious crash.
If you currently carry $1M or less of liability coverage, check the price to raise your limit to at least $2M. This typically adds $1–5/month, or about $15 annually, to your overall premium and is one of the most cost-effective coverage upgrades you can make.
Should you add all perils insurance?
If you have an active auto loan or lease, you likely have both comprehensive and collision coverage on your policy per your lender’s requirements. All perils coverage offers a bundled version of these coverage options with additional financial protections in the case of theft.
* Not a complete list of covered perils
Collision and comprehensive coverage aren’t interchangeable, and both are needed for full protection against physical damage to your vehicle. Collision coverage deals with damage caused by a wide variety of collisions, while comprehensive covers theft, severe weather, vandalism, animals, and other non-collision perils.
Should you raise your deductibles?
Deductibles, or set dollar amounts you agree to pay in the event of a covered claim, apply to physical damage coverage such as collision, comprehensive, and all perils insurance.
A higher deductible can lower your car insurance premium, but there’s a tradeoff: you’ll need to cover a higher portion of your repair costs when you make a claim, and you’ll only be able to use your coverage for claims that exceed the deductible amount. Consider how much you could realistically pay out of pocket to repair your car and set your deductible as close to that threshold as possible without going higher.
The most common deductibles for comprehensive and collision insurance in Canada are $500 and $1,000. If you split comprehensive and collision into separate coverage (rather than an all-perils bundle), you’ll need to select a deductible for each type of coverage.
Should you add or remove endorsements?
Endorsements, or add-on coverage, can extend or modify your car insurance coverage. If you currently have no endorsements, you may want to consider some popular options such as:
- Roadside assistance
- Accident forgiveness
- Loss of use/rental car coverage
If you currently have these benefits but haven’t used them, weigh the cost of each endorsement against the chance that you’ll want to use them in the next year as well as the out-of-pocket cost you’d incur if you needed the coverage but didn’t have the endorsement.
Read more: OPCF endorsements
Are you getting the right discounts?
Check to see if you’re receiving all the car insurance discounts you may be eligible for. Many Canadian auto insurers offer discounts for the following:
- Installing winter tires on your vehicle between certain dates (a mandatory discount in Ontario)
- Equipping your vehicle with an approved anti-theft device such as a TAG system
- Maintaining a clean driving record
- Paying your annual premium in full rather than in monthly payments
- Driving less than the average Canadian
Be prepared to provide documentation for some discounts. For example, an odometer reading may be required for distance-based discounts.
Renewal is a built-in opportunity to evaluate how well your car insurance coverage matches your current life circumstances. A new car, new job, growing family, and other driver factors can change your insurance needs from year to year, making a coverage review essential. Licensed insurance brokers at PolicyMe can help you conduct a thorough coverage review and consider changes that could improve your financial protections in line with your financial priorities.
What happens if you don’t renew your car insurance?
If you don’t renew your car insurance before the expiry date, one of two things may happen:
- Your policy could renew automatically: If you’re enrolled in automatic payments through your bank account or credit card, you may be charged for the next policy term unless you take action to change or cancel the policy.
- Your policy could expire: If you aren’t enrolled in automatic payments and don’t make a payment to keep your coverage active, it will expire on or after your renewal date.
If you miss your renewal date without making a payment and your policy expires, you cannot renew your coverage. Instead, you’ll need to purchase a new policy. Even if you buy the same coverage from the same insurer, your policy will be considered a new policy following a lapse in coverage.
If your car insurance policy expires without new coverage in place, you’ll be unable to drive legally and could face steep fines, suspension of your driver’s license, and other legal penalties. In Ontario, fines for driving without insurance can be as high as $50,000. You’ll also have difficulty finding affordable insurance in the future with a policy lapse on your driving record.
How car insurance renewal differs by province
Car insurance renewal rules differ by province, especially in provinces that use a public auto insurance system. While all provinces allow drivers to complete some policy renewals online by making a payment for the following year’s premium, broker review is typically encouraged and may be required in some public auto insurance provinces.
Can you switch car insurance before renewal?
Yes, you can switch car insurance companies before your policy renews.
Before switching car insurance, check your policy documents for the insurer’s policy regarding cancellation. Many insurers will charge what’s known as a “short-rate cancellation fee” if you end your coverage before the renewal period.
Contact your insurer to confirm any fees you may be charged for canceling early and compare them to the savings you could get by switching.
FAQ: Car insurance renewal
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.