Car Insurance Auto-Renewal
Everything you need to know about extending or renewing your car insurance in Thailand.
The Basics of Car Insurance Auto-Renewal
When you buy car insurance, you get a policy that covers you for a specific amount of time. Car insurance policies are typically valid for 6 months to a year. After the policy’s period has expired, you must either renew it or cancel it. This essentially means that you have the option of keeping your current insurance coverage or shopping for new car insurance and ensuring that you have a new policy in place before your current one expires.
Many Thai insurance companies offer no-claim bonuses, which are discounts on renewal rates for those who have made no claims or only a few minor claims in the previous year. This is only available with a limited number of insurance plans, mostly those in the Type 1 class. The renewal rate, on the other hand, will be increased if claims are filed multiple times in the same year. Most insurance companies take the opportunity to raise your premium when you renew, so you could end up paying much higher premiums than if you didn’t renew and shopped around.
Key Points
- With car insurance, loyalty can be expensive. Auto-renewing your car insurance could actually increase your premium.
- Auto-renewal premium rates are affected by several reasons such as the market changed or the insurance industry suffered significant losses, you relocated to a new location or address or had claims filed against you.
- In most cases, it is best to shop around and buy a new car insurance policy before your current policy ends, so you can get better rates for the same coverages.
How Does Auto-Renewal Work?
Renewal of a car insurance policy is a simple procedure that requires little effort from the policyholder. If you do apply for the renewal, when the term of your car insurance contract expires, your insurer will automatically renew your policy.
You should get an auto-renewal letter or email, sometimes even a text message, around 21 to 30 days before your policy expires. In the letter or email, they will tell you your policy is going to expire. They will also tell you how much you are paying now and what your new price will be. With this email, you have the option to renew or go and get a new one. If you don’t do anything, your car insurance policy will auto-renew as soon as the validity period ends, so you’ll be automatically covered just like before.
Is Auto-Renewal Legal?
Auto-renewal is completely legal. However, the insurance company has to tell you the last year’s price so you can compare it to your new premium, and if you’ve renewed several times in a row, they have to encourage you to shop around. These are required to ensure that you’re treated fairly.
Only in a few cases would an auto-renewal be considered illegal, such as if you did not agree to have funds deducted at a specific time each month/annually and the company went ahead and did it anyway. This is known as “slamming,” which occurs when an insurance provider sells you a policy without your consent.
When an insurance company fails to honour your policy or your claim after you paid the premium via auto-renewal, this could be considered illegal on their part. A company cannot later claim that you did not have the funds when they deducted your premium because they were not available at the time of renewal. Otherwise, they would falsely deny coverage, which is illegal.
Auto-renewal is completely legal, however, your insurer must to treat you fairly and follow the correct proceedures.
Why Does Auto-Renewal May Cause Premiums To Increase?
When you receive your notice of renewal, you’ll learn about your new insurance premium. It could be more than you were paying before, for a variety of reasons. Car insurance premiums are calculated based on a number of personal factors. If any of those factors have changed over the course of your policy term, your premiums may have changed as well.
Below are some of the main reasons why your car insurance premium might increase after an auto-renewal:
– The market has changed, for example, accident rates increased, or the insurance industry suffered significant losses.
– You relocated to a new province or address.
– You were involved in an at-fault accident or committed a traffic violation.
– You filed claims or had claims filed against you.
Make sure that you take a note of the day your your insurance policy ends.
How Can You Stop Auto-renewal?
You have 2 options if your car insurance is about to end and you don’t want to keep your current coverage. The first option is to notify your current insurance company that you don’t want to renew your policy. The second option is to purchase a new policy that begins before your current policy expires.
Some companies will let you cancel your policy over the phone, while others will require a letter indicating your intent to cancel. Refusing to renew your policy is the same as cancelling your car insurance unless if you have signed up for the auto-renewal.
What Should You Do If You Want to Switch to Another Insurance Company?
If you decide to get your car insurance from a different company, here are the steps you should take:
– Choose whether you want to hire an independent agent or conduct your own search. An expert will be there to help you choose from a variety of carriers. While you can get quotes from carriers online, working with an independent agent or broker means you only have to submit your information once.
– Figure out what coverage you will need. You may want to keep the same coverage you have now, or you may want to change the particulars of your coverage and adjust your coverage limits.
– Complete the application. Regardless of whether you work with a broker or not, you’ll need to provide basic information such as your name, birthday, address, Social Security Number, vehicle VIN, and your statements page from your recent car insurance policy.
– Collect your estimates. You’ll receive car insurance quotes or estimates in a timely manner. When comparing prices, make sure you’re comparing prices to prices for the same coverage amounts and policy terms.
– Decide on a carrier. You can use reviewers and third-party rating sites to assist you in making your choice. You can cancel your current car insurance if you’ve selected a carrier and bought a policy.