Renewing Your Insurance

If you’ve ever purchased an insurance policy, then there’s a good chance the policy was an annual renewal contract. This is the case with most forms of insurance sold worldwide – plans generally last 365 days in duration, at which point they can either lapse or be renewed by the policyholder.

In Hong Kong, almost all of the insurance plans you encounter will be annually renewable. There are some exceptions. Travel insurance, for example, is obtained by many people on a per-trip basis. But even here, there is the possibility of being covered under an annual travel policy if you’re overseas frequently enough to warrant the protection. Some types of insurance may limit the number of times you are able to renew a policy, while others may allow the policyholder to continue renewing their coverage (and paying an annual premium) for a lifetime.

Renewals are an important part of insurance, and if you have an insurance policy you will encounter this administrative burden eventually.

A Renewal Means a New Insurance Contract

The most important thing to remember when it comes to the renewal of any insurance product is that this represents the end of your current contract of coverage. Remember, your insurance is a contract between you and the insurance company that you will pay a premium in return for coverage (or protection) against a different risk.

The contract will have a start date (commencement, or “effective date”) and an end date (cessation or “end date”). Unless otherwise cancelled prior to reaching the end date of the policy, the coverage will naturally expire at this time. However, for most insurance products you will be offered the opportunity to “continue” or renew your coverage so that there is no interruption in protection. It is extremely important to note that a renewal is not a continuation of the expired policy, it represents a new contract for coverage between yourself, and the insurance company, for another 365 days.

It is extremely likely that changes will be applied to the new contract. Some of these may be relatively small, but others could impact you and your use of the insurance in meaningful ways.

There are a number of reasons why your contract could change at renewal.

The insurer could be adding a new settlement network to their coverage offering, or could be removing a benefit, or could be changing the price of your protection. Any one of these changes could meaningfully impact your decision to continue or renew your insurance plan, so it is important to have some idea of what they are, and why they may occur.

Depending on the changes (or lackthereof) being presented to you in your renewal offer you generally have 3 options;

• Decline to renew
• Renew
• Counter the insurer’s offer

Non-Renewal

If you choose not to renew your policy (perhaps you don’t like some of the changes being made to the plan), then your coverage will end on the original end date of the contract. No further coverage will be provided, and any subsequent insurance must be applied for and re-underwritten.

Renewing your insurance

If you opt to renew your coverage then you will sign the insurance company’s renewal offer and pay the requisite premium as agreed. Coverage will continue to be provided to you without interruption.

Countering the Insurer’s Offer

This is normally done by restructuring your coverage to see if you are able to obtain a policy which is more in line with your original objectives. For example, if you hold a health insurance policy you could look at upgrading or downgrading your plan, or even adding additional coverage modules.

Premium Changes at Renewal

One of the most common things to encounter when renewing any insurance policy will be a premium change. In Car insurance, for example, this can actually be a good thing – if you have held the policy for at least two years without submitting a claim you may receive a No Claims Discount bringing your overall premium down.

In many cases, however, premium changes tend to be increases, rather than discounts.

Staying with Car Insurance as an example, many insurers will place a premium loading on older vehicles due to their higher risk of suffering a malfunction and being involved in an accident. So, while you may be receiving a 60 percent discount on your policy, your premium could actually start to increase again if your vehicle is old enough.

Age is an important factor for many types of insurance, and as things and people get older the cost of covering them with insurance increases. This is one of the typical issues facing health insurance as people are more likely to require medical treatment as they age. As such, it is extremely important to realize that as you move from age-band to age-band the cost of your health insurance wil increase in line with your higher medical risk.

Benefit Changes at Renewal

While not common, as mentioned above there is the possibility of the insurer changes benefits within coverage at a policy’s renewal date. This could be done for a multitude of reasons, but will fundamentally impact your policy’s coverage and likely necessitate an evaluation of whether you’d even want to continue on the plan.

If you want to stay receiving coverage under the plan you already have, for example you might be attempting to complete a waiting period or (in the case of medical insurance) have a pre-existing condition, it can be possible to look at a different coverage solution from the same insurance provider – attempting to continue your existing policy with a different combination of coverage options.

However, it may be a case that no suitable solutions exist for you and you need to find continuing insurance protection elsewhere.

Insurance renewals with CCW Global

At CCW Global we simplify insurance for you. We know you’re not an expert in renewals, and benefit changes, but we do understand how stressful those things can be – especially if you’re not receiving the clear, concise, and timely information you need to make an informed decision.

Our dedicated renewals team gives you advance notice of any upcoming renewal, as well as any changes to your policy. We then work with you to find alternative solutions, or to renew the policy as your needs dictate. With the combined decades of experience offered by our expert Insurance Renewals advisors, you don’t even need to set a calendar reminder – our team does all the leg work for you.

If you have any questions about an upcoming insurance renewal you may be managing, or if you want to learn more about how CCW can assist in the renewals process, Contact Us today.