Pausing Auto Insurance: Possible?

While you can't pause or freeze your car insurance, you may be able to suspend it, depending on your state and insurer. If you're not planning on driving for an extended period of time, you can reduce your coverage or cancel your policy. However, if you cancel your insurance, you may need to cancel your vehicle registration and file an affidavit of non-use with your state.

Cancelling your auto insurance policy

Secondly, it is important to initiate a new insurance policy before cancelling your current one to avoid a lapse in coverage. This is because a lapse in coverage may result in higher rates in the future and, if you are still driving, you may be subject to expensive fines and the potential suspension of your driver's license if you are caught without insurance.

Thirdly, when cancelling your auto insurance policy, you should contact your insurance provider to understand their specific cancellation process and any associated fees. Some insurance companies may require a signed cancellation letter or a notice period, usually of 30 days, for cancellation without penalty. You may also be able to receive a prorated refund for any prepaid premiums, although some insurers charge a cancellation fee.

Finally, if you are cancelling your auto insurance policy because you are moving to a new state, you should be aware that different states have different insurance requirements. Therefore, it is important to initiate a new policy that complies with the requirements of your new state before cancelling your current one.

Reducing your coverage

You can reduce your auto insurance to the minimum car insurance requirements. Almost every state requires liability insurance, and others mandate uninsured/underinsured motorist coverage, personal injury protection and/or medical payments coverage.

Consider keeping comprehensive insurance (or adding it) if you are storing the vehicle while you don't drive it, in case it suffers damage while stored. Comprehensive pays to replace your car if it's stolen, and it covers non-driving problems such as vandalism and damage from falling objects.

You can also reduce your coverage on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost-effective.

If you have a car loan, your lender may require you to keep both comprehensive and collision coverage.

If you reduce your coverage to comprehensive only, you can limit your costs while not driving your vehicle, and your car is still protected from damages not related to an auto accident. You can also avoid a gap in coverage, which can increase your rates, and you can easily reinstate insurance coverage.

However, you could be personally responsible if you drive without liability insurance, and you may not be eligible for comprehensive-only coverage if you have an auto loan or lease. You could also be in trouble legally if you drive without liability insurance.

Suspending your coverage

Suspending your car insurance coverage can be a good way to save money if you have a vehicle that is out of use for an extended period of time. However, it is not as simple as suspending a subscription service.

How to Suspend Your Coverage

First, check with your insurer to see if they allow you to suspend your coverage. Not all insurance companies offer this option, and it may depend on the state you live in. If you are able to suspend your coverage, you will likely need to file an "affidavit of non-use" with your state's Department of Motor Vehicles (DMV) to halt state-required auto coverage. This will officially notify the state that you won't be driving your car for a specified period of time. Keep in mind that you may need to cancel your vehicle's registration before suspending your insurance coverage.

When to Suspend Your Coverage

There are several situations in which you may want to suspend your car insurance coverage:

• Your car is in long-term storage
• You are moving to another country
• You are going away to college and won't be driving
• You are experiencing a health condition that prevents you from driving for a long period
• Your driver's license is suspended
• You are waiting for a suspended driver's license to be reinstated
• You are deployed overseas with the military

Benefits and Drawbacks of Suspending Coverage

Removing yourself from a policy

If you're not planning on driving for an extended period of time, you may want to remove yourself from a policy. This is a good option if you're going away but others in your household will be driving the car. It can also save you money if you're a riskier driver than the others on the policy, as it reduces the odds of a crash. However, if it won't save you money, there's little benefit to removing yourself, and it may be more convenient to stay on the policy.

You can remove yourself from a policy if you no longer live with the policyholder and no longer drive their vehicle. If you're going to be away temporarily, it may be a good idea to keep yourself on the policy so that you can drive the vehicle when you're back.

To remove yourself from a policy, you may need to provide proof that you no longer live with the policyholder. Depending on the company, you may be able to do this online or through an app, but some insurers may require you to contact a representative to remove yourself from the policy.

Cancelling your policy

Firstly, cancelling your auto insurance leaves your vehicle without coverage, which may be an issue with your state. Most states require you to have at least the state's minimum amount of liability insurance on your vehicle to keep your vehicle registration valid. If you take auto insurance off your vehicle, you must turn in your registration and plates to your state's Department of Motor Vehicles (DMV), or you could face penalties such as fines or even suspension of your registration and/or driver's license.

Secondly, cancelling your insurance can create a lapse in your insurance history. Continuously insured customers generally get better rates than drivers who have coverage gaps, who are typically labelled "high-risk drivers". If you cancel your policy and then purchase a new one when you want your coverage to resume, your insurance premium may increase.

Thirdly, if you have financed your vehicle, your lienholder will require you to keep coverage on the car, especially collision and comprehensive insurance, as they want the car protected even while it's sitting and not being used.

If you still want to cancel your auto insurance, you can do so by contacting your insurance provider. You may call your insurer, contact an agent through the company's mobile app or website, mail in a cancellation request, or speak to an agent in person, depending on your carrier's options. You may be required to pay a cancellation fee or give a 30-day notice ahead of your cancellation date. You may also be required to sign a cancellation letter, which includes your policy number, your name, and the date you want your policy to be cancelled.

If you are only cancelling your insurance for a short period of time, it may be better to reduce your coverage or suspend your coverage, if your insurer allows it, instead of cancelling your policy altogether.

Frequently asked questions