In the insurance world, renewal is the process by which, once a policy reaches its expiration date, its validity is extended for a new coverage period. Auto insurance policies are typically issued on an annual basis. In other words, except in special cases, coverage expires each year and must be renewed. As a result, renewal is a particularly important moment for both the insurance company and the policyholder.
According to a recent Mapfre study, many Spaniards (35.4%) check their policy once a year. However, 25.9% do so only rarely, typically when a problem arises, and 16.8% never review their policy at all. Check your coverages
By default, most car policies include tacit or automatic renewal clauses in order to ensure that you don’t end up without coverage. This does not prevent you from checking if your insurance has the appropriate coverage and limits for you next year. Below you’ll find some of the key aspects of the process that you should be aware of.
Notice periods and cancellation
Whether by letter, email, or text message, your insurance company notifies you in writing of the renewal prior to its expiration. The document will include the new premium or any changes included in the contract. Within this same period, the insurance company may also notify you of its decision not to continue the policy, along with the reasons for doing so. In that case, you will need to find an alternative insurance provider.
If, on the other hand, you decide not to renew your car insurance for another year, you must inform the insurance company in writing at least one month before the policy’s expiration date.
Payments and grace periods
For a renewal to become effective, payment of the premium for the new policy period is essential.
In most Latin American markets—such as Mexico, Colombia, Chile, and Argentina—as well as in Spain, once your policy reaches its expiration date and the renewal is issued, you are generally granted a grace period (typically between 15 and 30 days) to make the payment.
During this period, you will remain covered while driving. However, if the grace period ends and the premium has not been paid, the policy is suspended and your insurance coverage ceases.
Key points of the review
Assuming that your personal information and bank account details are already up to date, here are some other key points you should prioritize when reviewing your policy before renewal.
- Coverages. Check whether the coverages included in your current policy are still the ones you actually need. For example, depending on the age of your vehicle, it may no longer make sense to maintain all-risk coverage. Also, review whether the policy conditions remain the same or if there are new exclusions that did not affect you before but may now be relevant. Your driving habits may have changed as well. If you now regularly drive on unpaved roads, for instance, make sure that this type of use is covered under your policy.
- Deductibles and compensation limits. As you know, the deductible is the amount you must pay out of pocket in the event of a claim if your policy includes this modality. Make sure the amount is still appropriate for you. Likewise, compensation limits are extremely important. Imagine your policy sets a limit of €15,000 for third-party damages and you are involved in an accident where the losses exceed that amount. In that case, you would be responsible for paying the difference yourself. Make sure to review these coverage limits for your own peace of mind.
- Actual use of the vehicle. When you took out your insurance policy, you may have declared a specific use for your vehicle (personal, professional, estimated annual mileage, parking in a garage or on the street, etc.), and that situation may no longer be the same. For example, a year ago you might have been working from home and now you commute 50 kilometers a day to get to the office—or, on the contrary, you may barely use your car anymore. In both cases, your risk profile has changed, and your policy should reflect that.
- New drivers. Similarly, adding new drivers to your policy is always a key consideration. If your son or daughter has recently obtained a driver’s license and will be using the vehicle regularly, it is essential to inform your insurance company. Only by doing so can you ensure that those journeys are fully covered.
- Roadside assistance. If you have ever been stranded in the middle of nowhere on a Sunday afternoon, you already know how valuable this coverage can be. Take the time to review exactly what your roadside assistance includes: from the distance at which assistance becomes available, to how far towing services will take your vehicle, and whether a replacement car is provided. The differences between policies can be significant.
Renew the perfect policy for you
Keep this in mind: renewing your car insurance without reviewing it is like signing a contract without reading it. Taking some time to review your policy and ensure it meets your needs is one of the keys for the insurance to fulfill its main function: surprise-free protection.
At Mapfre, we offer a variety of auto insurance policies designed to suit different driver profiles and vehicle types, ranging from basic coverage options to more comprehensive and flexible plans, such as ‘Premium Car’ in Argentina, ‘Familiar’ auto insurance in Colombia, and ‘Tú Eliges’ in Mexico.
Wherever you are, if you choose to renew your auto insurance policy with Mapfre, you can enjoy the peace of mind that comes from knowing you, your passengers, and your vehicle are backed by high-quality protection.
