Finance glossary
Renewal
Also known as: Auto-renewal
In simple terms
Renewal is when your policy comes to the end of its term (usually a year) and continues for another. Many policies renew automatically unless you tell the insurer to stop.
On this page
What does renewal mean?
Renewal is the point at which an insurance policy is continued for a further term. Most personal policies run for a year, so renewal comes round annually with a fresh premium and, sometimes, changed terms.
Many insurers set policies to auto-renew: unless you opt out, the policy simply continues and the premium is taken again. This is convenient but can mean paying more than you need to.
How renewal works
Before renewal, the insurer must send you the new premium and, alongside it, show last year’s premium so you can see any increase. For auto-renewing policies they must also remind you it will renew automatically.
Since 2022, FCA rules ban the “loyalty penalty”: your renewal price must be no higher than the equivalent price the insurer would offer a new customer buying the same policy through the same channel.
How could this affect me?
Renewal is a natural moment to check you are still getting good value. Even with the loyalty-penalty ban, shopping around or haggling can often beat the renewal quote, especially once add-ons and excess are compared.
If you do nothing on an auto-renew policy, you keep cover but may pay more than necessary. Diarise the renewal date, review the quote against last year’s price, and compare before you let it roll over.
Things to watch out for
- Auto-renewal can roll you onto a higher price if you do nothing.
- The “cheapest” renewal is worth comparing — shopping around often beats it.
- Check what changed: excess, cover limits or add-ons may differ from last year.
- Cancelling an auto-renewal after it has taken payment may incur a charge.
Know your rights
- At renewal the insurer must show last year’s premium next to this year’s so you can see any increase (FCA rules).
- Under the FCA general insurance pricing rules, your renewal price must be no higher than the equivalent new-customer price for the same policy and channel.
- For auto-renewing policies the insurer must tell you clearly that it will renew automatically and make it easy to opt out; you can complain to the Financial Ombudsman Service if it does not.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FCA, General insurance pricing practices (PS21/5) (opens in a new tab). Accessed 22 Aug 2026.
- MoneyHelper, Insurance renewals and how to cut the cost (opens in a new tab). Accessed 22 Aug 2026.