Can You Pause Car Insurance?
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It would be nice if you could simply pause your car insurance if you don’t plan on driving your car for a while. However, it’s not that simple. You are still responsible for insuring your car. Your lender or state laws may require that you keep a minimum amount of coverage on your car, even if you are not driving it. Also, not all insurers allow you to suspend your coverage, so you may need to shop around.
Suspending your insurance essentially pauses your policy but doesn't cancel it, saving you from a lapse in coverage. Not every insurer will let policyholders suspend coverage, or they may only allow it in certain situations. Depending on your state, you may need to file an affidavit of non-use to notify your state’s DMV that you won't be driving your vehicle.
Pausing your insurance means you don’t pay for unnecessary insurance for a car you don’t use without a coverage lapse, which would increase premiums. If you keep comprehensive insurance your car will be covered for non-driving incidents like vandalism, animal damage and theft.
How Can You Suspend Your Car Insurance?
Not all insurers will let you suspend or pause your car insurance temporarily. Some will only allow a suspension if the reason meets specific criteria. If your car is leased or financed, your insurer will likely deny your request.
If you’re not financing or leasing your car, speak with your insurer to see if they’re able to pause or suspend your car insurance. If they say no, you can either lower your coverage to your state’s minimum requirements or cancel your coverage.
Typically, the best option is to keep paying coverage since canceling can result in a lapse in coverage, which will cause your premiums to soar when you decide to reinstate car insurance. Remember that if you suspend your car insurance, it won’t be protected against risks like vandalism, fire, animal damage or theft, which are covered only by comprehensive coverage.
Is Insurance Required if I’m Not Driving My Car?
Legally, you are required to have car insurance if you own a car, even if you don't drive it. Even if you store your car in your driveway or garage or on the street, it still needs to be covered. Otherwise, it can be seized by law enforcement.
You are allowed to cancel your insurance policy at any time, but you should only do this if you have coverage elsewhere, if you no longer own a car or if it is in storage. However, if your car gets stolen, damaged or vandalized, you'll be responsible to pay for any resulting costs if you don’t have comprehensive insurance coverage.
If you are traveling abroad, have a suspended license or don’t plan on driving for an extended period, you may be able to reduce your coverage on a policy. However, you would only suspend liability insurance and keep comprehensive coverage to protect your car from theft and vandalism. If you do choose to drive your car at all during this period of time, you will need liability coverage to drive legally.
If you drive but don’t own a car, buy non-owner’s car insurance, which lets you legally rent or borrow a car, or file an SR-22 without a car.
What Is an Affidavit of Non-use?
If you’ve decided to suspend or cancel your car insurance policy, you will need to get an affidavit of non-use from the DMV. This allows you to own an uninsured car. Some insurers will automatically file this with your state, but not all. You'll need to confirm with your agent first. Applying for an affidavit of non-use is free
Which Parts of My Car Insurance Can I Suspend?
If you don’t plan on operating your car for a while, you might be able to cut back on your coverage — if your insurance company allows it. It’s a good idea to keep comprehensive coverage, which protects you in the events of fire, theft and vandalism.
What Happens if You Pause or Suspend Your Car Insurance?
Suspending coverage pauses your policy without canceling it, saving you from a coverage lapse. Insurers don't always let customers suspend coverage, or they may only allow it in certain situations. By pausing or suspending your car insurance, you are giving up important protection like collision, liability and uninsured motorist. Depending on your insurer, fees may also apply.
When Should You Suspend Car Insurance?
You may be able to pause or reduce your insurance if:
- You’re putting your car into storage for an extended time
- You are traveling abroad
- You are vacationing for a while
- You drive a vintage car
- You are deployed overseas
- You have a suspended driver’s license
- You have an illness or injury that prevents driving
- Your vehicle is being repaired and you cannot drive it until it is fixed
- You are out of work and cannot keep up with your premiums
In any case, before you pause, suspend, or reduce your liability coverage, you may have to file an “affidavit of non-use” to notify your state’s DMV. You should also consult your lessor or loan holder to ensure that you don’t violate any prior financing agreements, such as with a lienholder if you are financing or leasing the vehicle.
Can You Reactivate Car Insurance After it’s Paused?
Once you’re ready to drive your car again, call your insurer to ask about reinstating the coverage you need, especially state minimum requirements. Once your policy is in place, you should contact your state’s DMV to ensure that your registration is still valid.
Are There Consequences When You Cancel or Suspend Car Insurance?
While you can cancel your car coverage at any time, try to avoid canceling your coverage altogether. In some states, it is against the law, so check with your state’s laws. Additionally, when you don’t have a car policy for a certain length of time it shows as a lapse in your insurance record, which insurers see as a risk factor. Even letting your policy lapse by a day between policies can raise your rates. You can also face severe consequences if you take your car out for a drive without an active policy.
In some situations, your insurer will let you suspend your car insurance temporarily, but your car won’t be covered if you or someone else drives it. Anyone who drives it will be considered an uninsured motorist and will have to cover any expenses for any injuries or damages they cause unless they have their own car insurance.
What Are the Alternatives To Pausing Your Car Insurance?
Instead of suspending your liability coverage when you’re not using your car, there are alternatives to pausing your car insurance.
- Reduce Coverage
You can save money while you’re not driving by reducing your coverage You may want to lower your liability limits or remove add-ons like collision insurance or roadside assistance, as you won’t be using them.
- Switch to Pay-per-mile Insurance
You can pay for the miles you actually drive with usage-based insurance, which is available in some states. Your insurer may offer pay-per-mile insurance or you may be able to enroll in usage-based programs that allow your insurance company to track your driving.
- Non-owner’s Car Insurance
Non-owner insurance provides liability coverage for bodily injury and property damage when you are driving a car you do not personally own.
- Ask Your Insurer About Discounts
You may qualify for discounts that can help you reduce your insurance premium.
- Cancel Your Policy
You can cancel your policy if you sell the car. Your insurer may send you a cancellation letter to sign, and some may charge a cancellation fee. Make sure you get a copy of your policy cancellation. It’s highly advised that you immediately buy a non-owners car insurance policy to avoid a rate hike when you decide to buy another car.
Should You Pause Car Insurance?
If your car policy is up for renewal or you’re considering pausing your policy, SmartFinancial can help you find the right option for you at an affordable rate instead of going without insurance altogether. Just enter your zip code and answer a few questions below to see quotes from qualified insurers in your area.