How to Suspend or Cancel Your Car Insurance Policy
You sure as hell do not need to pay for things you don’t use, and that includes car insurance for a vehicle that’s rarely driven. It’s only natural to consider abandoning your car insurance policy especially if you own an idle vehicle. It could also make sense to cancel or suspend the insurance policy temporarily.
It is important to note that you can reduce or temporarily suspend your auto insurance policy. You could also remove yourself from a policy altogether. But each of these comes with its own downside and criteria.
You can always opt to cancel the insurance policy. However, it is against the law to uninsured a car, even if you barely drive it. This is especially true if your situation is temporary.
The best option might be to suspend your car coverage temporarily, as this will help you save some money. This might be your best bet if you need to drive your vehicle again after some time, helping you stay legal and financially protected.
But here’s the catch: Most providers of auto insurance policies place some rules on suspending buck coverage. An example of this might be that the insurance company needs proof that your car has been idle for a minimum of 30 days.
The pandemic has driven a lot of hardship on the global economy. If you recently lost your job due to the coronavirus, then relax as this is not the end of the world. Because insurance companies and other financial institutions are much more likely to be understanding and lenient of your situation.
I’m here to tell you that when it comes to car insurance policies, there are basically five good options to look into:
1. You could request a Covid 19-related payment plan.
2. Decrease your insurance coverage.
3. Halt or suspend your insurance policy.
4. Exclude yourself from the policy.
5. Cancel your policy.
Covid 19 related payment plans:
Most insurance companies are willing to negotiate and help their customers that have been affected by the pandemic. Payment plans and delays can take many forms depending on your state and the insurer:
a. Having a custom payment option.
b. Special payment plans such as the pandemic-related plans for financial hardship.
c. Halt on cancellations due to a default in the payment of insurance premiums.
d. Auto insurance refunds. Most companies are offering a rebate for April and May.
It doesn’t matter who your insurance provider is. The most important part is to let your auto insurer know if you’re going to be late on payments.
Decrease your Coverage:
This comes in handy if you’re not eligible for suspension on your policy. It also helps you prevent your hiatus from being called a gap in premiums, which would likely attract higher payments when switching providers.
For starters, you can reduce your coverage to the minimum requirements by the state you reside in.
It is required by law to have liability insurance plus personal injury protection and uninsured/underinsured motorist coverage.
Even if you barely drive your vehicle, you should consider keeping comprehensive coverage (or adding it if you don’t have one) should it suffer from damage while being idle, covers vandalism, and also replaces the car when stolen.
Normally, you need to keep comprehensive and collision coverage altogether except if your insurer is willing to let you keep one and not the other and you plan to store your car long-term.
If your insurance company allows you to buy a comprehensive coverage and drop the others, including a liability coverage, then you surely need to contact the DMV. This is because you’ll need to file a document that clearly states a non-use of the vehicle and reduced insurance for anyone to drive it legally. In this case, an affidavit.
Halt your Insurance Policy:
This option basically pauses your premiums without canceling your policy while aiding to prevent you from having coverage lapse.
Most of the time, insurance providers do not allow customers to suspend their insurance policies. It’s not impossible, but this happens only in certain situations. Insurers are willing to give grace periods on payment plan terms. But if you believe you’ll be out of work and end up surpassing the available grace periods due to the pandemic, the company might suggest suspending your policy temporarily. This also leaves you uninsured while you keep looking for a job.
However, I would not advise this option unless you have a secondary transportation alternative such as the train, bicycle, or public bus. You might also need to file an affidavit to the state department that lets the state know you won’t be operating your vehicle long-term. The state department will officially halt auto coverage required by the state.
Excluding yourself from the Policy:
If you have plans to travel, you should remove yourself temporarily from a household car insurance policy. This is a good option if others in the family will be driving the car.
It is worth noting that this helps you save money especially if you’re a reckless driver than others on the policy. If it doesn’t, it is best and convenient to stay on the policy as there is little benefit from removing yourself. This is also true if you don’t plan to leave the household.
Canceling Your Insurance Policy
You could decide to cancel your car insurance policy if there is no other source of income or you’re barely making enough to support yourself. This could be the best choice for households that have been badly hit by the pandemic and with no other way to pay their bills.
If you barely move around the city, it’s best to find a sustainable transportation method like a bike or going on foot. This comes in handy when your vehicle remains idle in the garage and you’re certain you won’t be using it anytime soon.
