Can You Pause Car Insurance Temporarily?

Motorists cannot just pause their entire auto insurance policies whenever they want and start again as they are pleased. Most insurers won’t entertain requests for suspending coverage and states would at least require explanation and removal of the vehicle off the street. But it may be possible with some companies and in many states to reduce the coverage to Comprehensive only, which would cut the premium as much as eighty percent and avoid cancelling the whole policy.

Keeping a Comp-only policy would make sure that you get substantial premium reductions and avoid policy lapse, which may increase the costs when you want to reinstate it again. Also, it would still protect the vehicle against perils like fire, theft, vandalism and other weather related and accidental damages.

If the vehicle isn’t going to be driven and can be taken off the roads, Comprehensive only may be a good option to suspend Collision and Liability automobile insurance coverage, especially for fairly valuable vehicles. Most states would agree to it if the owner lodges an affidavit of non-use with their local DMV. Most companies and states won’t agree to suspending car insurance for anything less than a month. But there are no set limits to how long it can stay frozen.

Having a loan on the automobile would complicate things because lienholders may not agree to reducing coverage and insist the full coverage is maintained. Since they have an interest in the vehicle’s wellbeing, they have a say in how it is insured.

Essentially, policyholders can suspend most coverage at any time they want and just keep Liability only vehicle insurance coverage, which is the only legally required part of a policy. Handful of companies may refuse to offer minimum state required liability coverage because they don’t offer basic policies. But most of them would agree to it and nearly all of them would agree to keeping the level of Liability coverage that came with the policy at the time of the purchase.

Here are some of the acceptable reasons for pausing car insurance temporarily.

  • Being deployed (or sent) overseas
  • Going to college and leaving the automobile behind
  • Being unable to drive because of an injury or illness temporarily
  • Waiting for a license suspension to end
  • Going away for a long time like spending the winter in a warmer state
  • And being unemployed and unable to pay the premium

It is important that the car isn’t driven when it isn’t insured because there won’t be any coverage and there will be penalties for doing so.

Except what is discussed above, there are several options when the car isn’t going to be driven for a while. The obvious one is to cancel the policy or allow it to lapse at the end. In that case, the owner would need to arrange coverage again when it is needed and they may end up paying higher rates because of the lapse on their records.

The second option is to get rid of any nonessential coverage like roadside recovery, business use and rental reimbursement, increase deductibles, discuss the situation with the insurer and see if the premium can be reduced enough while maintaining Liability, Collision and Comprehensive covers. This may be a sensible solution for a shorter time period, especially if it would cost a lot of money to store away the vehicle anyway.

If this is going to be a recurring on and off situation, motorists may be served better by usage based auto insurance policies. For example, pay-per-mile policies are getting popular and available in many states. Then, owners don’t need to go through the process each time and they only pay as much as they drive.

This may not be the cheapest option but it may be the most convenient and facilitating option, which allows driving when you are back in the US or your hometown again (in case of students). It also allows others to drive the vehicle and it can be kept anywhere. It is best to get a few automobile insurance quotes for different scenarios and options and crunch some numbers to find the most suitable policy option.