Suspending Auto Insurance: Is It Possible?

Yes, you may be able to suspend your car insurance temporarily instead of cancelling it. This option is known as a car insurance policy suspension or car insurance hold. However, not all insurance providers offer this option, and eligibility requirements may vary. Typically, you can only suspend coverage if your vehicle won't be in use for an extended period. During the suspension, your car remains uninsured, but it's an economical alternative to cancelling the policy.

When to suspend car insurance

Suspending your car insurance can be a good way to save money if you won't be using your vehicle for an extended period. However, it's important to note that not all insurers offer this option, and it may depend on your state and individual circumstances. Here are some scenarios where suspending your car insurance might be appropriate:

• Moving Abroad or Long-Term Travel: If you're moving to another country or travelling for an extended period, you may not need to keep your car insurance active in your home country.
• Deployment: If you're in the military and are being deployed overseas, suspending your car insurance can be a good option.
• Illness or Injury: If you're unable to drive due to a health condition or injury, suspending your car insurance can help you save money during your recovery.
• Driver's License Suspension: If your driver's license has been suspended, you may not need to keep your car insurance active until you're able to drive again.
• Vehicle Repairs: If your vehicle needs repairs and will not be drivable for a significant period, you may want to suspend your insurance temporarily.
• Long-Term Storage: If you're putting your vehicle in long-term storage, you might consider suspending your insurance, especially if you won't be driving it at all.
• Financial Hardship: If you're experiencing financial difficulties and won't be driving your car, suspending your insurance can provide some financial relief.

It's important to note that suspending your car insurance means you won't have coverage during that time. Before making any decisions, be sure to review your state's requirements, contact your insurer, and explore alternative options such as reducing your coverage or removing add-ons.

How to suspend car insurance

Depending on your state and insurer, you may be able to suspend your car insurance if you're off the road for an extended period. However, not all insurance providers offer this option, and eligibility requirements may vary. Typically, you can only suspend coverage if your vehicle won't be in use for an extended period.

If you're planning to take your car off the road for some time and you don't have a lease or loan on it, your insurer might let you suspend some car insurance coverages to save money. Comprehensive and collision coverages are optional, so you can remove those anytime if you don't have a car loan or lease.

If you cancel your insurance, consider also cancelling your vehicle registration, which may involve filing an affidavit of non-use with your state. If you have a car lease or loan, your lender likely requires you to maintain a minimum level of comprehensive car insurance coverage and auto collision coverage, in addition to the state-required auto liability coverage. This applies even if your car isn't being driven.

To suspend your car insurance, contact your insurer to find out how to suspend, reduce, or cancel your coverage. Be prepared to share information about the reason for the suspension and the expected duration. You should also consult your lessor or loan holder to ensure that you don't violate any prior financing agreements.

Before removing liability coverage, you should also find out from your state's department of motor vehicles if you need to file any forms, such as an affidavit of non-use, because your car isn't being driven.

Pros and cons of suspending car insurance

Pros of Suspending Car Insurance

• You won't have to pay for insurance while your car is out of use.
• You won't have a coverage lapse, which could increase your future rates.
• You can keep minimum coverage and save money when your car is not in use.
• It's easy to reinstate full coverage when needed.
• It helps you maintain current discounts.

Cons of Suspending Car Insurance

• The vehicle won't be covered if anyone wants to drive it.
• The vehicle won't have insurance against non-driving problems like fire, animal damage, vandalism or theft.
• Drivers with car loans are typically ineligible.
• You're personally responsible if you drive without full coverage.
• It's not available to those with auto loans or leases.
• Not all insurance providers will let you suspend your auto insurance.

Alternatives to suspending car insurance

If you're not planning on driving for a while, you may be able to suspend your car insurance coverage. However, this option is not available to everyone, and it depends on factors such as your state, insurer, and whether you have a car loan or lease. If you're unable to suspend your car insurance, there are several alternatives you can consider:

Reduce your coverage

If you're not eligible for suspension, reducing your coverage is a good alternative. You can lower your premiums by removing optional coverages such as roadside assistance or custom parts and equipment coverage. You can also switch to a higher deductible, which will reduce your premiums if you have enough savings to cover a higher deductible in the event of an accident.

Remove yourself from a shared insurance plan

If you're on a shared insurance policy with family members or friends and won't be driving for a period, you can remove yourself from the policy temporarily. This option can save you money, especially if you're a riskier driver than the others on the policy. However, if it doesn't result in significant savings, it may be more convenient to stay on the policy.

Get non-owner car insurance

If you don't own a car but regularly drive someone else's, you can consider getting non-owner car insurance, which tends to be less expensive than standard car insurance.

Opt for usage-based car insurance

Usage-based insurance (UBI) aligns your insurance premium with how much and how safely you drive. If you drive infrequently and practice safe driving habits, signing up for a UBI program can get you a lower rate. However, your rate could increase if your driving habits are deemed risky.

Request a payment delay or plan

If you're experiencing financial hardship, many auto and home insurers are willing to work with you. Depending on your insurer and state guidelines, payment assistance can come in various forms, such as pausing cancellations due to non-payment of premiums, offering special payment plans or custom payment options, or providing auto insurance refunds.

Reinstating car insurance after suspension

Understanding the Impact of Suspension

Firstly, it's important to understand the consequences of letting your car insurance lapse. A gap in coverage can result in legal and financial penalties, including fines, suspension of your driver's license and registration, repossession of a leased vehicle, and a negative impact on your credit score. These consequences can vary by state, so be sure to review your specific state's laws.

Contact Your Insurance Provider

The first step towards reinstating your car insurance is to contact your insurance provider as soon as possible. Different insurance companies have varying reinstatement policies, and some may be stricter than others. By reaching out promptly, you can determine their specific rules and requirements for reinstatement.

Address Outstanding Payments

If your policy was cancelled due to non-payment, you will likely need to pay any missed premiums and late fees to reinstate your coverage. Be prepared to pay off any outstanding balances to increase your chances of a successful reinstatement.

Complete Required Forms and Sign Declarations

In some cases, you may need to fill out forms or sign declarations as part of the reinstatement process. For example, some companies may require you to sign a "statement of no loss," declaring that no losses occurred during the lapse in coverage.

Reinstatement Fees and Penalties

Be prepared to pay reinstatement fees charged by your insurance company. These fees can vary, so check with your provider to understand their specific charges. Additionally, there may be state-imposed fees and penalties for reinstating your registration and license.

Maintain Continuous Coverage

To avoid future issues, it's essential to maintain continuous car insurance coverage. Even if your license is suspended, consider keeping your insurance active to prevent higher rates and other complications when reinstating your license and insurance.

Explore Specialized Insurers and Compare Quotes

If your previous insurance company is unable or unwilling to reinstate your policy, you may need to explore alternative options. Specialized insurers that cater to high-risk drivers may be able to provide coverage, but their rates are typically higher. Shop around and compare quotes to find the most affordable option.

Comply with State Requirements

Depending on your state's requirements, you may need to file an SR-22 or FR-44 form to certify financial responsibility and meet the minimum liability insurance requirements. These forms are often necessary for drivers with serious traffic offenses, such as DUI or reckless driving.

Apply for a Hardship or Restricted License

If your driver's license is suspended, consider applying for a hardship or restricted license. This type of license allows you to drive for specific purposes, such as commuting to work or school. Having this type of license may make it easier to obtain car insurance.

Remember that the process of reinstating car insurance after suspension can vary depending on your location and insurance provider. Always review your insurance company's specific policies and your state's regulations to ensure a smooth reinstatement process.

Frequently asked questions