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Pause or Cancel Your Car Insurance

Cancel Your Car Insurance

Why pay for things if you don’t need to? With inflation setting in and everything becoming more expensive, now is a great time to find ways to cut costs. If you have an idle vehicle, don’t continue to pay hundreds of dollars each month for insurance that you don’t need! Learn how to cancel your car insurance here. 

Wondering how you can ditch your auto coverage on a car that you never drive? Can car insurance be paused? Curious if it makes more sense to temporarily remove yourself from the policy?

If you have an out-of-use vehicle, pausing your car insurance is a great way to keep money in your pocket. But it’s not as easy as cancelling Amazon Prime or your Netflix subscription.

Your options may be limited based on whether you have a car loan and why you’re taking a driving hiatus. If you still use the car for any reason, it legally needs to be insured.

For those facing financial hardship because of lost work due to the COVID-19 pandemic, insurers are likely to be lenient. When it comes to your auto insurance, there are five options to consider:

      • Request a COVID-19 related payment delay
      • Reduce your coverage
      • Suspend your coverage
      • Remove yourself from the policy
      • Remove yourself from the policy

Here’s what you need to know about each of these options.

Due to the impacts of the coronavirus pandemic, many home and auto insurers are willing to work with customers who have been financially affected during these times. Payment assistance is available in many forms, including:

      • Special payment plans (ie. delayed payments)
      • Pausing cancellations due to nonpayment
      • Custom payment options
      • Auto insurance refunds

Make note that all relief options are still available. Some weren’t extended past May 2020. Contact your insurer for updates. If you anticipate being late in paying your premiums, alert your insurance company before your account is delinquent.

Reducing Your Coverage

Reducing your coverage is one way to save money on car insurance. Here are some pros and cons to consider.

Pros Cons
Won’t pay for unnecessary insurance while your car is out of use. The vehicle may not be usable if it needs to be driven.
Your coverage won’t lapse, which means no risk of increased rates in the future. You still pay for the insurance that you maintain.
With comprehensive coverage, your car is still covered for non-driving issues, such as vandalism, theft, fire, and animal damage. You’ll be required to keep certain coverages if you have a car loan.

Reducing your coverage is a great option if you aren’t eligible for suspension. By retaining coverage, you can prevent an insurance lapse. Confirm with your insurer ahead of time that cutting back coverage won’t lead to a lapse in coverage.

When reducing your auto insurance, be sure that you still meet the level of coverage required by your state.

Almost all states require liability insurance. Others require uninsured and underinsured motorist coverage, along with personal injury protection as well as medical payments coverage.

You may want to keep comprehensive insurance, or add it to your policy, if you plan to store your vehicle when it’s not in use. This protects you financially if your car is damaged while in storage.

Comprehensive coverage will also pay to replace your car if its stolen, as well as non-driving issues such as damage from falling objects or vandalism.

Depending on your insurer, you may not have to maintain collision coverage. Some insurers allow a comprehensive-only policy, also known as a car storage insurance policy. This type of coverage is ideal if you’re storing your car for a long period of time.

What Happens if You Suspend Your Car Insurance?

Here’s what you need to know about suspending your car insurance.

Pros Cons
No car insurance payments while your car is out of use. The vehicle has no coverage so it can’t be driven.
Your coverage won’t lapse, which means no risk of increased rates in the future. No insurance to cover non-driving issues like vandalism, theft, fire, or animal damage.
If you have a car loan, you’re likely ineligible.

Suspending your car insurance coverage is like putting a pause on your policy, but the policy is not cancelled. This protects you from a coverage lapse.

Not all insurers let customers suspend coverage. In some instances, it’s only allowed in certain situations. If you expect to be out of work for longer than your insurer’s grace period, suspending coverage may be suggested.

Be aware that pausing coverage means that you’ll be uninsured while looking for a new job. This option should only be used if you have alternate means of transportation.

Depending on where you live, you may need to file an affidavit of non-use to pause state-required coverage. This document lets the state know that your car won’t be operated for a set amount of time.

If you have a car loan, suspending coverage isn’t likely to be an option.

Removing Yourself from the Policy

Another option to cut costs on auto insurance is to remove yourself from the policy.

Pros Cons
The vehicle is still covered for non-driving issues like vandalism, theft, fire, and animal damage. You have to pay for insurance while you’re away.
The vehicle can still be driven legally because it has insurance coverage. You will need to add yourself back to the policy once you’re back home for no less than 30 days.
You’re unlikely to have a coverage lapse.

Instead of changing your coverage, you may be able to temporarily remove yourself from the family policy. If others will be driving the car but you’re going away, this is a great option to consider.

Removing yourself from the policy can save money, especially if you’re considered to be a riskier driver (ie. younger male or older female). If removing yourself from the policy has little to no monetary benefit, then it’s best to stay on the policy.

Be aware that removing yourself as a driver covered by the policy isn’t the same as being an excluded driver. Even if you aren’t listed on the policy, you can still drive the car.

Excluded drivers aren’t supposed to drive the car and may have to prove that they have insurance coverage elsewhere.

How Do I Cancel My Insurance Policy?

The final option to cut costs is to cancel your insurance policy altogether.

Pros Cons
You won’t pay for car insurance while your car is out of use The vehicle isn’t covered and therefore can’t be driven.
You can cancel car insurance at any time, no matter your insurer. No coverage against non-driving problems.
You’ll have a lapse in coverage, which could cause higher rates in the future.
If you have a car loan, you’re ineligible.

Wondering how to cancel my esure car insurance? You can choose to cancel your auto coverage and get a new policy when you start driving the car again. However, if you have a car loan, this isn’t an option.

Since the car doesn’t belong to you, the lender requires some type of insurance on the vehicle. This is similar to why you must have loaner car insurance coverage when renting a car.

If you’re considering cancelling, contact your local DMV. You may need to file an affidavit of non-use to take the car off the road and to drop state-required coverage.

The biggest drawback is that cancelling your policy causes a lapse. Having coverage gaps could mean that you’re labeled as a high-risk driver, which means you’ll pay more for insurance.

The one exception is cancelling car insurance after selling the car. If the car’s title is no longer in your name, you aren’t responsible for insuring it.

Featured Image: Megapixl

About the author: Liam McGillivray is a writer and editor at Wealthy Millionaire. He holds a Master's degree in Public History from the University of Victoria and a BA in History and Classical Studies from Queen's University. His interests include fantasy literature, NFT gaming, and film studies.

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