Can You Pause Car Insurance?

Yes, you can pause car insurance, but it depends on your circumstances and insurer. Whether you need to take your car off the road due to work commitments, moving abroad, traveling, or for any other reason, pausing your car insurance may be a great way to save money. 

It’s important to stress that if you want to ever drive your vehicle again, do not cancel your insurance entirely. As your next insurance quote may increase if insurers see a gap in your coverage. 

Most insurers allow you to pause with a simple call to explain your situation. It may seem daunting, but take these steps to pause your car insurance today:

Step 1: Car Lease or auto loan? Check with your lender first 

The first step is to work out if you are in a car lease or auto loan situation. The first point of the call will be to work out the minimum required insurance you need to avoid breaching your loan or lease agreement. Your state will have requirements too which have to be met, regardless of whether the vehicle is being driven or not. If you have purchased your car outright and have no loan, please move on to step 2.

Step 2: Work out insurance downtime

Once you have worked out your car ownership situation, try to accurately determine how long you will be off the road. This could fixed amounts of time for example a work assignment abroad, a health situation where you are not allowed to drive for a set period, or other commitments. Then note down the dates you know you will be off the road.   

Step 3: Contact the insurance company 

Once you know how long you want to pause your policy, contact your insurer. They will guide you through the process of how much coverage you want to pause. It’s important to get in touch with your state’s DMV to check whether additional forms are needed to be filled in. As laws require you to tell the state that you will not be using the vehicle in an “affidavit of non-use” form. 

Step 4: Securely park your vehicle 

If you are ready to leave your vehicle, it needs to be parked in a safe place. Car theft is a hot topic right now and thieves use laptops to quickly steal vehicles. Choose a location to store your car that will least likely to be detected by thieves. Places such as lockups, garages, private parking lots, and anywhere that has CCTV or security. After all, you do not want to come back to your car that has been stolen whilst you are not driving it, as you may not be covered under a paused insurance plan.

To reactivate your insurance after suspending it, reach out to your insurance company to inquire about reinstatement. Depending on the length of time you paused, you may need to apply for a new policy. Check beforehand if you are unsure about this.

After reinstating your insurance, ensure your car registration is valid by contacting your state's DMV. Submit any required paperwork with updated insurance information. It's important not to drive until all these steps are completed to avoid potential fines for driving without proper coverage or valid registration.

If you are in financial hardship there are many alternatives to pausing car insurance to save you money. it's important to note that driving without insurance is illegal in most places and can result in severe consequences. Explore several alternatives that allow you to adjust your insurance policy.

1. Remove insurance add-ons

One way to lower your insurance costs without compromising essential coverage is to remove optional add-ons from your policy. These add-ons, such as roadside assistance and custom parts and equipment coverage, can significantly increase your premium. Maybe you have an SUV that is expensive to run. By eliminating them temporarily, you can reduce your insurance expenses while still meeting the legal requirements for auto insurance.

2. Take your name off a shared insurance plan

If you share an insurance policy with family members or others and won't be driving for a specific period, consider temporarily removing yourself from the plan. By doing so, other members on the policy can continue driving as usual while you avoid paying for coverage you don't currently need. Remember to add yourself back onto the plan when you're ready to get behind the wheel again.

3. Switch to a higher deductible

Opting for a higher deductible is another alternative to consider when trying to lower your car insurance premiums. A deductible is the amount you agree to pay out of pocket before your insurance coverage kicks in. By choosing a higher deductible, you're essentially taking on more financial responsibility in the event of an accident. However, this can lead to a lower premium since the insurance company assumes less risk. Ensure that you have enough savings to cover the higher deductible before making this adjustment.

4. Understand more about car insurance premiums 

Understanding the factors that influence car insurance premiums can help you make informed decisions when it comes to adjusting your coverage. Factors such as your driving record, vehicle type, location, and coverage limits all play a role in determining your premium. By learning more about these factors, you can identify areas where you may be able to make changes to reduce your insurance costs without compromising necessary coverage.

5. Cancel the policy altogether 

If you no longer need car insurance due to selling your vehicle, canceling the policy is an option. Assess your need for coverage, review cancellation policies, consider future insurance needs and potential rate increases, explore non-owner insurance for occasional driving, and consult with your provider. Make this decision after careful evaluation, prioritizing safety and financial protection, and seeking guidance from your insurance provider.

Remember, it's crucial to consult with your insurance provider before making any adjustments to your policy. They can provide you with specific guidance based on your circumstances and help you find the most suitable alternative to pausing car insurance. By exploring these alternatives, you can potentially save money while still maintaining the protection you need on the road.

When considering the option of pausing car insurance, it's important to weigh the pros and cons. Here’s a look at both sides:

Pros

• Cost savings: Pausing car insurance allows you to temporarily avoid paying premiums, which can provide financial relief during periods when you're not driving.
• Flexibility: It provides the flexibility to adapt your coverage to your specific situation, such as extended travel or temporary vehicle disuse.
• Temporary coverage suspension: By pausing your car insurance, you can maintain continuous coverage history, which may help you secure lower rates when you reinstate your policy.

Cons

• Illegal to drive without insurance: Pausing car insurance means you will not have coverage while driving, which is illegal in most places and can lead to significant legal and financial consequences if you are involved in an accident.
• Gap in coverage: Insurance companies consider gaps in coverage as a risk factor, which can result in higher premiums when you resume coverage or obtain a new policy in the future.
• Limited protection: While your car insurance is paused, you will not have financial protection against theft, vandalism, natural disasters, or other non-driving-related incidents.
• Potential cancellation fees: Some insurers may charge fees for pausing or reinstating your policy, which could offset the anticipated cost savings.
• Unforeseen circumstances: Pausing car insurance means you won't have coverage in case of unforeseen events, such as emergencies or sudden changes in plans that require you to drive.