What is meant by "policy renewal" in insurance?

"Policy renewal" refers to the process of extending the coverage of an insurance policy at the end of its term. This is a critical aspect of insurance as it allows policyholders to maintain their coverage without interruption. When a policy is renewed, the insurer typically reassesses the terms of coverage and any associated premiums, which may change based on several factors, including claims history, changes in risk, or adjustments in underwriting guidelines.

Renewal can occur automatically or require action from the policyholder, depending on the type of insurance and the terms laid out in the original policy. This process ensures that policyholders continue to enjoy protection against risks and liabilities covered under the policy without needing to go through a completely new application process.

Understanding the renewal process is essential for policyholders, as it impacts their ongoing ability to secure coverage, manage costs, and stay protected against unforeseen events.