With more people working from home and having fewer road trips, many are looking into potentially suspending or pausing their auto insurance. Have you modified your driving habits? If so, are you thinking about putting your car insurance on pause to save some money?
Suspending your insurance coverage can be done the right way and save you from extra expenses. If you decide to completely cancel your policy, you may incur additional fees and have to pay higher premiums on getting insured again in the future. Plus, taking breaks or lapses may prompt possible difficulties with insurers. Here’s what you need to know if you want to suspend your auto policy.
Reducing your insurance rate
If you're ineligible for suspension, cutting back coverage may be a viable option. This would help you in avoiding canceling your policy and stop any insurance lapse from being recorded which could result in higher rates later. Make sure to confirm this with your insurer before making any decisions.
Lower your auto insurance premiums by only getting the coverage required by the law. This typically includes liability coverage, and in some cases, uninsured or underinsured motorist coverage, personal injury protection, and or medical payments coverage.
If you want to protect your car from damage while not in use, getting comprehensive insurance is a wise decision. Not only does it pay for the replacement of any stolen vehicle, but it also covers other issues such as vandalism and damage from external forces like falling objects.
If you have the opportunity to keep comprehensive coverage and drop all other forms of insurance, including liability, it's wise to check with your agency of motor vehicles. They may require you to submit an affidavit of non-use since the car would then lack enough insurance for anyone to legitimately drive it.
Suspend your car insurance
A great way to take a break from paying for coverage without having to go through the hassle and disruption of canceling it is to think about putting your car insurance on hold for some time. Doing this will allow you to maintain coverage, avoiding any gaps in your protection and keeping you secure.
Companies may not always offer customers the ability to suspend coverage, or may only allow it in particular cases. If you foresee being unemployed for longer than your insurer's available grace period or payment plan terms, they may advise you to explore this option. Taking a break from your existing car insurance coverage can be a risky move that leaves you carless, vulnerable, and unprotected while searching for new employment.
It is advised to have an alternate means of transportation before using this method. You must also submit an "affidavit of non-use" from the agency of motor vehicles for your country-required auto coverage to be suspended. This document notifies the authorities that you plan on not using your car for a certain amount of time.
Canceling the policy
Canceling your auto coverage might be the way to go if you're not driving the car. However, if you have a loan on that vehicle, it could be difficult as the lender will likely require some form of insurance for it. It's important to remember that if anything were to happen to your car, such as a natural disaster, and you don't have insurance, it could be very costly for you to fix the damage - without the help of insurance. With the price of a new car in Canada close to $40,000, there is no way you want to take the risk of not having car insurance.
The downside to canceling your policy is that it can create a gap in your insurance history. Drivers who have no gaps in their records usually get better rates than those who do, and they are deemed more reliable by insurers. Everyone's insurance needs are different, so it's important to find what works best for you.
If you don't plan to use your car for an extended period and you don't have a loan or lease, you can save money by suspending car insurance coverages without having to cancel your policy. Refraining from terminating your car insurance plan might be a better option if you want to drive in the future. This is because any gap in a car insurance policy will almost certainly translate into higher prices when you resume driving.