Freeze Auto Insurance: Yes Or No?

While you can't pause or freeze your auto insurance, you can reduce your limits or drop liability coverage if you're not planning on driving for a while. This is known as storage insurance or car-storage insurance. You can also cancel your coverage if you're switching policies or getting rid of your car.

Cancelling auto insurance is an option when getting rid of your car

Cancelling your auto insurance is an option when getting rid of your car, but it's not the only option.

Suspending your auto insurance

You may be able to suspend your auto insurance coverage if you don't plan on driving for a while. This option is usually only available if you're putting your car in storage and won't be driving it at all. Suspending your coverage essentially pauses your policy without cancelling it, which means you won't have a coverage lapse that could increase your future rates. However, not all insurance companies allow you to suspend your coverage, and you'll need to check with your state's DMV about the requirements for suspending coverage.

Reducing your auto insurance coverage

If you're not eligible to suspend your coverage, you may be able to reduce it. You can reduce your auto insurance to the minimum car insurance requirements, which usually include liability insurance and, in some states, uninsured/underinsured motorist coverage, personal injury protection, and/or medical payments coverage. If you're storing your car, you may want to keep comprehensive insurance, which covers non-driving problems like fire, animal damage, vandalism, and theft. Reducing your coverage can help you avoid a coverage lapse, which could increase your future rates.

Cancelling your auto insurance

If you're getting rid of your car, you can cancel your auto insurance policy altogether. You can cancel your policy at any time, but it's important to do it the right way to avoid penalties. Check with your insurance provider about any cancellation fees, cancellation letters, or notice periods they require. If you've prepaid your premiums, you'll also need to find out if you're eligible for a refund.

If you're selling your car, make sure you have insurance up until you sign the title over to the new owner. If you're planning to buy a new car, it's a good idea to hold off on cancelling your current policy until you have a new policy in place to avoid a lapse in coverage.

Other options

If you're going on a long vacation but keeping your car, you may be able to reduce your coverage or remove yourself from a shared policy temporarily. Contact your insurance provider to discuss your options.

You can't pause your auto insurance, but you can reduce your limits

While you can't pause or freeze your auto insurance, there are other ways to reduce costs if you're not planning on driving for a while.

One option is to reduce your limits or drop liability coverage. This means that you lower the maximum amount your insurer may pay out for a claim. While this will reduce your premiums, it also means that you may be responsible for any expenses that exceed your coverage limit.

If you're putting your car in storage, some companies may allow you to suspend your liability coverage, as long as your lender allows it. Liability coverage is necessary if you're going to be driving, as it covers the costs of damage or injury you cause. However, suspending liability coverage isn't always an option, especially if you have a lienholder or lessor who requires you to maintain a certain amount of coverage.

If you decide to suspend your liability coverage, you must restore your coverage before driving your car again. Additionally, you may need to file an "affidavit of non-use" to notify your state's DMV and consult your lessor or loan holder to ensure you don't violate any prior financing agreements.

Another option to reduce costs is to switch to a usage-based insurance plan, where you pay for the miles you actually drive. You can also remove add-ons like roadside assistance and collision insurance if you won't be needing them.

If you're on a shared policy, you can also remove yourself from the coverage, although this may mean that you won't be able to drive the car.

It's important to note that canceling your auto insurance policy altogether can leave a lapse in your coverage, which may result in higher rates in the future.

Suspending liability coverage is possible if you're putting your car in storage

If you decide to suspend your liability coverage, you won't be covered for any liabilities that may arise if you decide to operate your vehicle. It's important to note that you must restore your coverage before driving your car again. Additionally, drivers with auto loans or leased vehicles may not be eligible for suspended coverage.

Instead of suspending your liability coverage, you can consider other options to reduce your auto insurance costs while your car is in storage. One option is to reduce your coverage to comprehensive-only insurance, also known as car storage insurance. This will protect your vehicle from non-driving perils such as fire, theft, vandalism, and extreme weather. Comprehensive-only insurance can help you avoid a lapse in coverage, which can lead to higher rates in the future. However, you won't be covered for any liabilities if you decide to drive your vehicle.

Another option is to switch to usage-based insurance, where you pay for the miles you actually drive. You can also explore removing yourself from a shared policy if you don't plan on driving but others may need access to your car. Additionally, you can take advantage of discounts and shop around for cheaper car insurance options.

You can remove yourself from a shared policy

While you can't pause or freeze your auto insurance, you can remove yourself from a shared policy. Here's what you need to know about the process:

When to Remove Yourself from a Shared Policy

If you're the primary named insured on a shared policy and want to remove another driver, you can do so by contacting your insurance company and providing the necessary documentation. However, if you're not the primary named insured, you can only remove yourself from the policy.

Documentation Required to Remove Yourself from a Shared Policy

To remove yourself from a shared policy, you will likely need to provide proof of new insurance, proof of a new residence, or a signed removal request letter. Some companies may also require proof of death if a loved one has passed away. It's important to note that removing yourself from a policy may result in the loss of certain discounts, such as multi-car or group discounts.

Impact on Insurance Rates

Removing yourself from a shared policy can have both positive and negative impacts on your insurance rates. If you're a high-risk driver, removing yourself from the policy may lead to lower rates for the remaining drivers. On the other hand, if you have a good driving record and your own car, the rates may stay the same or even increase after removing yourself from the policy.

Alternative Options

Before removing yourself from a shared policy, consider other options such as reducing your coverage or switching to usage-based insurance. Reducing your coverage can help save money, especially if you're not driving as much. Usage-based insurance allows you to pay for the miles you actually drive, resulting in lower costs if you drive less.

In conclusion, while you can't freeze your auto insurance, removing yourself from a shared policy is an option to consider. Remember to review your insurance company's specific requirements and processes for removing a driver, as they may vary.

You can switch to usage-based insurance

While you can't pause or freeze your auto insurance, you can switch to usage-based insurance, which can help lower your premiums.

Usage-based insurance (UBI) calculates your insurance rate by analysing your driving behaviour, such as how often and how safely you drive. This includes factors like speeding, acceleration, harsh braking, mileage, and the time of day you drive. The better your driving score, the better your auto insurance rates.

UBI programs are offered by many auto insurers and can be mutually beneficial. You may earn a rate reduction, and your insurer can use the data to more appropriately price your policy.

There are two basic types of usage-based programs: driving-based and mileage-based. Driving-based programs measure your driving habits, such as how hard and how often you brake, how quickly you accelerate, and the time of day you drive. Mileage-based programs only measure how many miles you drive.

Before signing up for a UBI program, it's important to understand how the program works and what factors are used to determine your rate. Some things to keep in mind include:

• Drive less: Choose a period when you know you'll be driving as little as possible.
• Avoid driving after midnight: Accidents are common between 12 a.m. and 4 a.m., and driving during this time may increase your policy price.
• Check UBI feedback: Use the feedback on your driving habits to improve as a driver.
• Don't drive distracted: Avoid multi-tasking, eating, and using your cell phone while driving.

While UBI can offer many benefits, it's important to note that not all drivers will get cheaper rates. If you frequently engage in aggressive acceleration or hard braking, your insurer may raise your policy cost. Additionally, the device or app may not always be able to tell when you're driving defensively.

Frequently asked questions