Renewal is the continuation or extension of insurance cover after the policy has expired. If you took out a car insurance policy for a year starting from the 1st January, your insurance cover will end at midnight on the 31st of December. Your renewal date will be the date on which the existing policy matures, in our example the 31st of December.

Renewal will take place once the insurer has accepted the premium for a new policy term. A renewal policy will be issued by the insurance company to the insured as proof of the continuation of cover. It will stipulate any changes in the premium amount and other conditions, should there be any. The premium will not automatically change, it depends on the insured item, its current market value and the insurer’s own position in terms of insurance premium increases (which is normally linked to the inflation rate and the recent financial performance of the company.)

A renewal notice is send out by the short term insurer to the insured to remind him that the contract will terminate soon and he needs to take the necessary steps should he wish to continue with the cover for another period of insurance.