All states except New Hampshire require you to carry a minimum amount of auto insurance on registered vehicles. So, if you plan to keep driving, you'll need to maintain your coverage.
But what if you plan to stop driving your car just for a while? Then, you have two things to consider:
- Whether you can suspend your auto insurance
- Whether you should
Whether you can suspend it depends on state regulations, the insurance company's stance, and the lender's requirements if you have a loan on the car.
Since every state except New Hampshire requires you to carry insurance on registered vehicles, suspending coverage means you might have to suspend or cancel your car’s registration and then, if you want to put the car back on the road later on, reinstate it. Some states have a procedure for doing this, but it might be more of a hassle than it's worth.
Meanwhile, your insurance company may or may not allow you to suspend your car insurance coverage.
And, if you financed your auto, be sure to check the loan documents. Sometimes lenders require you to carry insurance on the vehicle and don't allow coverage suspensions.
What are the consequences of suspending your car insurance coverage?
Before taking any action on your existing car insurance coverage, it’s important to consider the consequences of suspending that coverage. Although the car will be safe from traffic accidents because you won't be driving it, it could still be at risk for damage from other causes, such as a hailstorm, flood, or vandalism. Or, it could be stolen, especially if parked outside an unoccupied house for months. Comprehensive and collision insurance protects you in case of theft or damage from events other than traffic wrecks.
Because of these risks, suspending the entire policy is probably a bad idea. If you're keen on suspending it, see if you can suspend portions of the policy and maintain comprehensive-only insurance or storage insurance.
What if your insurance company doesn't let you suspend coverage? Don't even think about not paying the premium and letting the insurer cancel it. Insurers will consider you a big risk with a canceled insurance policy due to nonpayment on your record. You'll pay higher premiums as a result once you're ready to purchase another car insurance policy – even if you go through a different company.
What are the alternatives to suspending your car insurance?
Instead of suspending your liability coverage while your vehicle's not in use, you can consider other options. Here are two:
- Reducing your coverage - lowering the liability limits and removing add-on/optional coverages like roadside assistance.
- Switching to usage-based coverage - choosing coverage that is based on car usage, including pay-per-mile programs.
