What is the effect of a renewal clause in a policy of insurance?

In this case, the original policy had a specified expira­tion date. Also, the renewal itself similarly stipulated a commencement date and a date of expiration. While not necessarily determinative, the presence of an expiration date suggests that the parties’ expectations were that a new contract would have to be entered into for insurance coverage to continue. This conclusion is supported by the wording of the renewal sent out by the insurer dated 4 November 1999, which stated, in part: In return for the payment of the premium, and subject to all the terms of this policy, we agree with you to provide the insurance as stated in this policy. Insurance is provided for only those coverage's for which forms are attached and specific amounts of insurance are stated, subject to any limits of liability. It is clear from these words that the renewal took the form of an offer. To conclude the contract of insurance, the insured had to accept it by paying a premium in order to renew the policy. This is a feature of a renewal requiring mutual consent and is therefore suggestive of separate and distinct contracts of insurance. As noted in Patterson v. Gallant supra, continuous policies of insurance ordinarily provide for further extensions of the policy in the original contract of insurance. There were no such provisions here. The original policy was silent on the issue of renewal. Furthermore, as noted by the learned trial judge, this policy is not in the class of insurance ordinarily considered to be continuous.