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Can I extend my car insurance for a month?

Here's what you need to know...

  • Traditional car insurance comes in 6 or 12-month terms
  • Premiums are fixed and guaranteed for the entire term after issuance
  • At the end of the term, policyholders will be sent a renewal or non-renewal notice
  • If you’d like to extend coverage, you should review new rates and submit payment
  • If you’re not happy with renewal rates, consider taking out a new policy for the additional time that you need coverage

Very rarely can you find a car insurance policy that’ll last for exactly the period of time that you need it. Since traditional policies for personal car insurance come in either a 6-month term or a 12-month term, there are very limited options when it comes to customizing the duration of your policy. Fortunately, you can typically cancel your insurance at any time and extend your policy if you qualify after a new underwriting phase. Start comparing car insurance rates now by using our FREE tool above!

If you’ve purchased an insurance policy, the declaration’s page that declares what’s covered and what limits you’ve selected will show exactly when the term ends. As you’re approaching the end of the contract, you’ll need to decide if you need coverage or if you’d like the coverage to end. For those who know they’ll need coverage for just about a month more, extending the insurance could be an option. Find out more about policy renewals and other solutions to consider to carry insurance on your car for a month.

Why do insurance companies offer only 6-month or 12-month terms?

Out of your curiosity, you might be wondering just why a company would offer just one term option to consumers who are buying coverage. After all, one consumer might need only 5 months of insurance whereas another might need 13 months. Unfortunately, offering such a personalized option for customers to bind coverage will cost the insurer more money and could take away from their profits.

While some of the larger insurers with high customer satisfaction ratings still offer annual policies, a majority of insurers will sell only 6-month plans because they benefit the provider. With a 6-month period, the insurer is free to reassess risk 6 months earlier than they would for a 12-month policy.

If you’ve had a loss or you’ve been cited for a moving violation, the company can surcharge your rates sooner.

It’s essentially less of a commitment, which means that the company can let go of riskier clients or charge higher premiums to justify keeping them. In some cases, clients will see their rates go down, but this isn’t quite as common as a rate increase.

What happens to your policy as it approaches renewal?

Regardless of the term you choose, it’s important to understand how a renewal works. Most companies will start to review your policy and look for errors and changes in risk about 45 days before your term ends. This is referred to as underwriting the risk in the industry and the company is free to do so only when the contract is about to expire.

During the underwriting review, the company will collect your information and may call you for bits of information that’s missing. All of this will be used to determine if you’re more of a risk now than you were when you applied last term. Some of the things the underwriter will want to know include:

  • How the vehicle is used
  • How often it’s driven
  • Who drives the car
  • How many drivers have access to the car
  • Claims that have been filed since the last term
  • Moving violation convictions for drivers in the household
  • Odometer reading of the car

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Once all of the information is gathered and the underwriter can get a good glimpse at the big picture, new rates will be calculated. If it’s found that the new risk doesn’t meet eligibility requirements, it’s possible that the company could set up what’s called a non-renewal. This means that the company has made the decision to end their relationship with your household and will give you until your renewal date to find other coverage. Some of the most common reasons for non-renewal include:

  • DUI conviction
  • Suspended or revoked license
  • Accidents resulting in injury or death
  • A combination of accidents and moving violations
  • A new high-risk driver has been added to the household

If your policy can’t be renewed, you won’t be able to extend your coverage for the additional month that you need coverage. If, however, you do qualify for your renewal, you’ll receive your new insurance bill for renewal in the mail about 30 days before it’s due. It’s at this time you’ll need to review the new declarations page to see if you feel like your rates are fair.

How to Setup Your Renewal for Just a Month

You can’t just call your insurer and tell them that you only want your renewal to last for a month. Instead, you’ll need to set up the right payment plan so that you’re not left waiting for a full 5 month or 11-month refund.

The best way to go about extending your term for a month is to pay for a month’s worth of premiums when your renewal is scheduled.

If you currently are billed for the entire term, you can call your agent to set up a payment plan with most carriers. If you have an automatic draft set up on your account, make sure that you cancel this after your first payment is made so that you’re not charged again. When it’s official that you don’t need coverage, you can submit your cancelation request and then you won’t have to worry about applying for a new plan.

Consider Getting Short-term Insurance

If you don’t qualify for renewal or you’re not happy with the new rates you’ve been offered, an alternative to renewing would be to purchase a new short-term plan. Temporary policies are quick and easy to buy, but you’ll only be able to buy liability and medical payments. If you want physical damage coverage for a specific car, you’ll need a traditional policy.

Now that you know what to do, it’s time to find the most affordable solution. If you’re curious to find out if your renewal rates are competitive, consider shopping around and comparing the premiums for the same amount of coverage. You can easily shop around by using an online comparison shopping tool that will show you multiple rates all at once. After you review these instant quotes, see which presents the most value and find out if you can choose a monthly payment plan. Start comparing car insurance rates now by entering your zip code in our FREE tool below!

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