A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 26, 2021

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Here's what you need to know...

  • An auto insurance policy is a contract that lasts for a specified period
  • If you’re buying standard insurance for a personal vehicle, you can choose between 6-month or 12-month insurance terms
  • Your term is written on your declarations page and also on your auto ID cards. The end date of the term is referred to as the policy expiration date
  • About 30 to 45 days before your policy expires, your insurer will run a renewal to assess risk and to calculate your new rates
  • To keep your coverage active, you must pay your renewal premiums before the coverage expires. If you don’t make a payment, the coverage will be terminated effective the expiration date

Car insurance policies are sold in terms. When you apply for insurance, you agree to pay a specified amount of money for a specified amount of coverage. While the premiums will stay level after the application is reviewed, they are only guaranteed for the policy term if you don’t make changes to your coverage or personal information.

During your term, you will have peace of mind in knowing how much you will pay each month for your insurance coverage. Unfortunately, not all consumers understand what happens when the insurance contract is up to expire.

If you are interested in learning how car insurance terms work and what might happen when your term expires, here’s what you need to know.

Use our FREE comparison tool today! Enter your zip code to get started.

How long do auto insurance policy contracts last?

When you sign up for car insurance, you are entering into a contract with your car insurance carrier. In the insuring agreement, it says that you agree to comply with the terms and conditions of the contract, and the insurer agrees to pay for claims.

If you don’t pay, or you fail to tell your insurer of a new risk, the carrier will terminate your coverage.

Insurance carriers in most states will only offer applicants the option to select between two terms. Terms are defined as how long the policy period will last under the current contract. The options that you can choose from include 6-month and 12-month terms. The longer the term, the longer that your rates are locked in.

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Where can you find your term insurance information?

If you’ve already purchased an insurance policy, and you’re not sure when your policy expires, you can find your term information a few places. The most common place to look is your declarations page, which shows your policy number, your effective date, your expiration date, your personal information, and your coverage.

If you can’t find your declarations page, you can also find your term by looking at your auto insurance ID cards. They include your policy number, term, VIN, and drivers on the policy. Policyholders who can’t find either of these documents can log onto their policies online or call their agent.

Do you get a notification that your policy is about to expire?

Auto insurance policies don’t just expire out of nowhere. Companies do send out documents that notify you that your policy is up for a renewal and that the company has reassessed your policy.

In most cases, the company starts to review your risk class and recalculate your premiums around 45 days before the policy expires.

When the company completes the evaluation, and they have decided to offer you an opportunity to extend your coverage another term, you will get a renewal notice in the mail. This thick envelope will include information on your policy rating, new disclosures, a policy booklet, and instructions on how to pay your new premium payment.

What happens if the company doesn’t extend you an offer to renew?

If the insurance company discovers that you’ve had several tickets or multiple accidents during the prior term, your coverage could be non-renewed. Whether or not the carrier will offer you a chance to keep your coverage going depends on the underwriting guidelines.

When you don’t qualify for a renewal under the guidelines, the insurance company will send you a non-renewal notice.

This notice will explain why the company is severing ties with you and when the coverage will expire and give you time to find coverage with a new carrier.

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What happens if you don’t make your renewal payment on time?

Cover ends at 12:01 am on the date of your policy expiration date. If you haven’t made either a full payment or a monthly payment by this time, your coverage will expire, and you will be taking on the risk when you get behind the wheel.

If you have an automatic renewal set up, you don’t have to worry about manually making a payment when it’s due. As long as you have an automatic payment set up, you can keep your coverage active without worrying about any lapses.

Can you reinstate a policy if it expires?

If you fail to make a payment, and your policy expires, many companies will not reinstate your coverage with a simple payment. Instead of offering you the option to reinstate your policy with the same rates that you were quoted, the company may ask that you have your policy rewritten. You should ask your agent as you shop around.

What are the consequences of letting your insurance expire?

Letting your auto insurance expire without having a new policy in place is just as bad as letting your policy cancel mid-term. If you have a lapse of coverage, you can face some severe consequences that can affect your finances and your future.

Here are some consequences that you should expect:

  • Suspension of your license or your registration
  • Fines, licensing fees, and court fees
  • Community service and court appearances
  • Vehicle impound for 30, 60, or 90 days
  • Jail time
  • High-risk insurance premiums and a loss of discounts

If your insurance is expired, it’s time to find new coverage. The best way to go about getting insurance is to shop around. Use a reliable online rate comparison tool and find out how much insurance will cost you through some of the most reputable carriers in the marketplace.

Start comparison shopping today by entering your zip code in our FREE tool!


  1. http://www.iii.org/article/what-auto-insurance
  2. http://www.tdi.texas.gov/pubs/consumer/cb020.html
  3. http://www.helpinsure.com/auto/autoglossary.html
  4. http://carinsurance.about.com/od/PolicyFundamentals/a/What-Is-An-Insurance-Renewal.htm
  5. http://www.mass.gov/ago/consumer-resources/consumer-information/auto-and-vehicle-insurance/understanding-insurance.html
  6. http://personalinsure.about.com/od/insurancetermsglossary/g/Insurance-Declaration-Page.htm
  7. http://www.ct.gov/dmv/cwp/view.asp?a=1523&q=251214
  8. http://www.casact.org/pubs/proceed/proceed81/81001.pdf
  9. http://carinsurance.about.com/od/PolicyFundamentals/a/What-Is-An-Insurance-Renewal.htm
  10. http://carinsurance.about.com/od/PolicyFundamentals/tp/What-Is-A-Non-Renewal.htm
  11. http://www.nasdaq.com/article/a-minute-past-midnight-poof-youre-uninsured-cm245273
  12. http://carinsurance.about.com/od/PolicyFundamentals/a/How-Do-I-Get-My-Car-Insurance-Policy-Reinstated.htm
  13. http://www.consumerfed.org/pdfs/140310_penaltiesfordrivingwithoutautoinsurance_cfa.pdf