Insurance auto-renewal – what it means

Posted by on March 15th, 2016 and last updated on January 27th, 2021

In 2011, the UK government created the Continuous Insurance Enforcement (CIE) rules.

CIE rules state that vehicles in the UK must be insured at all times, which means your insurance is never allowed to lapse and your vehicle should never be without insurance.

According to the Government, this was introduced to reduce the number of uninsured motorists (who cost each motorists around £30 a year in premium costs) on the road and there is only one exception to the rule.

Statutory Off Road Notification (SORN)

The only instance where you do not need to insure a vehicle you own is if you have it SORN.

A SORN is a certificate provided by the Driver and Vehicle Licensing Agency (DVLA) and one that needs to be applied for.

Essentially it’s official permission to keep your vehicle off the road without insurance.

Find out how to SORN a vehicle.

So where do auto-renewals come into this?

Automatic renewals (or auto-renewals) are not a new thing and have been around for a long time, but only now can insurers claim they are there to stop you falling foul of the law.

But what is an automatic renewal?

An auto-renewal is a clause in your insurance contract that states that your policy will continue for another 12 months if you do not give notice of cancellation to your insurer, normally within a certain ‘notice’ period.

As with most contract clauses, the notice period is usually around four weeks in length. If your insurer does not get served notice, your policy will be automatically renewed.

Is there a cooling off period?

With any new insurance policy or auto-renewal there will be a 14-day cooling off period.

In this two-week period you are legally allowed to cancel your policy but you may have to pay some cancellation and administration charges.


How do I know if I have an auto-renewal clause in my policy?

When you first get your insurance you should read the terms and conditions, going over them with a fine tooth-comb and sniffing out any clauses you didn’t expect to see or that you might not understand.

If we all did that then some of us would see that our motor insurance policies have an auto-renewal clause in them.

Unfortunately, a lot of people don’t check. Instead most of us leaf through and scan terms and conditions before slapping a paw print where we’ve been told to slap one.

Unfortunately (again), failure to read something in a policy is not a legally accepted argument. If you sign and agree to an auto-renewal policy then you have an auto-renewal policy.

Your policy will say if you have an auto-renewal clause so read it carefully. Alternatively you can contact your insurer to find out.

Doesn’t auto-renewal save me the hassle of finding a new insurance policy?

Undoubtedly, it’s easier to let your insurance policy automatically renew because you don’t have to do anything – but that doesn’t mean it’s cheaper to allow your policy to auto-renew.

According to, auto-renewal clauses in car insurance policies cost UK drivers £113 each on average.

That’s quite a substantial saving that’s being missed out on by people who allow their motor insurance policies to automatically renew.


How to stop my insurance auto-renewing?

Usually, insurers will inform you when you reach the last month of your current insurance policy.

At this point your insurer should offer you an auto-renewal price (sometimes more expensive than your current premium), outline your No Claims Bonus (NCB) and state how you can cancel your insurance.

If you’re interested in comparing prices again to see if you could save any money by getting a new insurance policy, this is a good time to start your search as it gives you enough time to serve your insurer notice.

You normally need to contact your insurer in writing to confirm that you want to cancel your policy, they will then send a document confirming your NCB once they have received notice.

Are auto-renewals cheaper than a new policy?

Auto-renewal prices have been on the rise for a while now and while they will still seem reasonable, most people could save money by getting a new policy instead of allowing their policy to automatically renew.

And that’s where can help. Compare motor insurance quotes now to see if you could get covered for less. Alternatively, if you’d prefer to get a quote over the phone please call 0330 022 8814 and one of the friendly team will be happy to help.

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