Dropping your auto insurance policy for a short while may appear to be a good idea to save on premiums. Say you are going away for couple of months and you won’t be taking your vehicle out of its garage. Would it be wise to drop your car insurance policy for that two of months? What would the consequences be, if any? Would you have any problems when you want to re-insure your car either with the same insurer or another carrier?
Cancelling insurance is the natural outcome of selling your automobile. However, it is a bit different story when you are keeping it because you may need to contact your local DMV and see if you need an “off road” certificate in your state. If your automobile is not insured it should not be kept on public roads. You should keep it in a private location. Some states may require you to surrender the vehicle license plates when you are giving up insurance until you get the coverage back. This is one point to check.
The second point is that you will probably be charged higher car insurance rates when you want to buy a new policy after you dropped the previous automobile insurance. That is why it may be beneficial to keep minimum auto insurance coverage while you are away to avoid the lapse. Most companies would offer great rates for such coverage and accommodate your request. You may keep only fire and theft coverage if the vehicle is garaged or you may keep the liability as well depending on costs. This way, you wouldn’t need to deal with DMV as well, if you are keeping your automobile.
You can read further on What Happens If Car Insurance Lapses. One of the questions on a vehicle insurance quote form is to find out if you are insured currently. Companies are not keen to insure drivers who will keep canceling on them due to non-payment or anything else. They are looking for policyholders who will keep paying their premiums for a long time rather than dealing with the ones who will drop vehicle insurance coverage often.
This may be seen as having money problems too and they don’t like policyholders with money problems. That is why they check credit score and offer better rates for drivers with good score. Also, people with money problems tend to submit more claims than people who are rather well-off. More and more insurers are looking at various indicators to calculate the chance of a policyholder submitting a claim, staying long with the company or switching the moment a better quote is available. In a way, they profile applicants and this affects the automobile insurance quotes they offer. So, appearing to be different one way or another can be seen as problematic and result in increase in your quotes.