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How to Reduce, Pause or Cancel Your Car Insurance

You may temporarily delete yourself from a policy or suspend, postpone, or limit your coverage.

It's not the time to pay for something you don't like, such as auto insurance for a parked vehicle. If you own a vehicle that you never drive, you may be considering whether it's better to cancel or suspend your auto insurance policy.

When you have an out-of-service vehicle, putting your auto insurance on hold will help you save money. However, it is not as easy as canceling your Netflix account. Furthermore, based on whether you're not driving the vehicle or if you have a car loan, your choices could be restricted. If you ever drive the car, you'll need to have it insured in order to remain legal and financially secure.

If you're having financial difficulties as a result of the coronavirus, insurers and other financial providers are likely to be understanding.

There are five key choices to consider when it comes to car insurance:

  • Request a coronavirus-related payment delay or plan.
  • Reduce your coverage.
  • Suspend your coverage.
  • Remove yourself from a policy.
  • Cancel your policy.


Coronavirus-related payment delays or plans

Many car and home insurance companies are able to partner with consumers who have been harmed financially by the coronavirus. 

Payment assistance can take a variety of forms, depending on the auto insurance and state regulations:

  • Pausing cancellations due to nonpayment of premiums.
  • Special payment plans, including delayed payments, for coronavirus-related financial hardship.
  • Custom payment options on a case-by-case basis.
  • Auto insurance refunds, with most insurers offering a rebate for April and May 2020 (at minimum).


It's worth noting that not all relief options have been extended beyond May. For the most up-to-date information, contact your insurer.

Which corporation issues your car insurance, the only thing you can do is notify them before the payments are past due — here's a rundown of financial institutions' contact details in case you need it.

Reducing your coverage

Pros:

  • You won’t pay for unneeded insurance while your car is out of use.
  • You won't have a coverage lapse, something that could increase your future rates.
  • If you keep comprehensive insurance, your car will be covered for nondriving problems like fire, animal damage, vandalism and theft.

Cons:

  • The vehicle might not be usable if anyone wants to drive, depending on how much you scale back coverage.
  • You'll have to pay for the insurance you keep.
  • You'll likely have to keep certain coverages if you have a car loan.


If you're not qualifying for suspension, cutting back on benefits is a smart way to prevent having to revoke your scheme.

That way, you'll be able to avoid seeing your break labeled as an insurance lapse, which would almost certainly result in higher premiums down the road. Confirm this with the insurance company ahead of time.

To begin, you can lower your auto insurance coverage to the minimum allowed by your state.

Liability insurance is required in almost every state, and some states also provide uninsured/underinsured motorist coverage, personal injury compensation, and/or emergency payments coverage.

If you are parking the car and not driving it, consider keeping robust protection (or adding it) in case it is damaged while being stored. Comprehensive coverage provides for the replacement of your vehicle if it is stolen, as well as non-driving issues like theft and injury from dropping objects.

Normally, comprehensive and crash policies are required, but if you're storing your car for an extended period of time, your insurer can make an exception to allow you to keep a comprehensive-only policy, also known as "car storage insurance." If you have a car loan, you will be required to maintain both extensive and crash coverage from your lender.

Normally, comprehensive and crash policies are required, but if you're storing your car for an extended period of time, your insurer can make an exception to allow you to keep a comprehensive-only policy, also known as "car storage insurance." If you have a car loan, you will be required to maintain both extensive and crash coverage from your lender.

What happens if you suspend your car insurance?

Pros

  • You won’t pay for insurance while your car is out of use.
  • You likely won't have a coverage lapse, something that could increase your future rates.

Cons

  • The vehicle won't be covered if anyone wants to drive it.
  • The vehicle won’t have insurance against nondriving problems like fire, animal damage, vandalism or theft.
  • Drivers with car loans are typically ineligible.


Suspending coverage effectively delays but does not void the contract, preventing you from going without coverage.

Customers may not necessarily be able to cancel coverage, or they may be able to do so only under such circumstances. This choice could be suggested if you expect to be out of work due to coronavirus for longer than the insurer's available grace period or payment plan terms. Pausing coverage, on the other hand, would leave you uninsured when you look for jobs.

Just use this option if you don't have another mode of transportation. To stop state-mandated auto coverage, you will need to file a "affidavit of non-use" with your state's department of motor vehicles. This paper notifies the state that you will not be using your vehicle for a specified period of time.

When you have a car loan, you won't be able to put your agreement on hold. Lenders typically demand that you keep insurance in place to cover issues like fraud and vandalism.

Removing yourself from the policy

Pros

  • The vehicle will be covered for nondriving issues like fire, animal damage, vandalism and theft.
  • The vehicle will still have the insurance needed to drive it legally.
  • You likely won't have a coverage lapse, something that could increase your future rates.

Cons

  • You'll have to pay for insurance while you're away.You'
  • ll have to add yourself back on the policy once you’re home for at least 30 days.

You will be able to temporarily exclude yourself from a family auto insurance contract rather than change your policies. If you're going away so someone in your household will be walking, this is a good idea to consider.

If you're a riskier driver than the ones on your policy, this choice will save you money because it decreases the chances of a collision. However, there's no point in deleting yourself if it won't save you money, and it's actually more convenient to keep on the policy. This might not be a choice if you are not moving anywhere and want to live with other covered drivers on the contract. Many insurance providers request that all drivers listed at the same address be included on a contract or be expressly "excluded."

Being a driver who has been removed from the policy is not the same as being a driver who has been disqualified. You can always drive the car if your name isn't on the policy. Excluded drivers are not permitted to use the vehicle, and they may be asked to provide proof of other insurance.

How do I cancel my insurance policy?

Pros

  • You won’t pay for insurance while your car is out of use.
  • You can cancel your car insurance regardless of your insurer.

Cons

  • The vehicle won't be covered if anyone wants to drive it.
  • The vehicle won’t have insurance against nondriving problems like fire, animal damage, vandalism or theft.

You'll have a coverage lapse, which could increase your future rates. Drivers with car loans are typically ineligible.

When you're able to drive the car again, you may want to cancel your vehicle insurance and get a new one. When you have a car loan, cancellation, including suspension, is unlikely to work. Your lender would almost certainly require that you have at least some protection on the car.

If you're worried of canceling, contact your DMV. To officially pull the car off the road and remove state-required insurance, the state can require you to sign an affidavit of non-use, similar to a suspension.

The most significant disadvantage of canceling is that it causes a gap in your insurance records. Customers that are covered on a regular basis Cars with coverage holes, referred to as "high-risk drivers," usually get lower fares.

There’s no single insurance option that works best for everyone. If you decide to keep your coverage, a solid payment history should help you get competitive rates down the road. 

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