If you are planning to park your vehicle for an extended period of time you might think that you can save costs by dropping your insurance coverage all together. Think again. A better road to take can avoid the twists and turns of re-insuring when you are ready to drive again may be suspending your liability coverage. Suspending liability on your vehicle keeps continuous – albeit limited – coverage. You won’t need to go to a nonstandard auto policy/high risk policy. Suspending liability helps you avoid paying unnecessarily higher premiums.
How can suspending liability insurance on your car be a better option than canceling your policy?
Talk to your insurer to confirm this option is available to you. If you aren’t planning on operating your vehicle for a month or more due to traveling abroad or if you’re placing your car in long-term storage for those long winter months, consider pausing your liability coverage.
Can you put car insurance “on hold?”
No insurance company will allow you to put a policy on hold, rather you will be required to cancel your policy all together and then start anew when you are ready to drive again. This will cause a “lapse in coverage.” These lapses often trigger red flags for insurers and cause your premiums to go up as you will be labeled a higher-risk.
Why do you have to keep insurance on a car you’re not driving?
The short answer is it is the law. In most cases, car insurance coverage is mandated by the state. Even if you aren’t driving your car, if the vehicle is registered you are beholden to the law to carry a minimum level of insurance. Beyond state requirements, insurance companies will look at your record of coverage. They will determine your risk level and any lapse in coverage can result in you being placed in a higher risk category. Thus, they require higher premiums and even higher levels of coverage.
What can you do to reduce costs if you aren’t driving your vehicle?
There are a number of reasons you may be putting your driving on hold for an extended period of time:
- Extensive repairs to the vehicle making it undriveable
- Long-term storage for your vehicle (convertible or motorcycle in winter months)
- Your Inability to drive due to illness or injury
- Your overseas military or career deployment
- Your suspended driver’s license
- Your lengthy travel abroad
All of these instances will put your vehicle out of use. You may think that dropping insurance coverage is right for you. Not necessarily the best move. Taking that path will likely lead to higher costs when you are ready to drive again. By suspending your liability coverage, you can stay compliant in the eyes of the law, keep in good standing with your insurer. You’ll also have peace of mind knowing that your car is still protected to damage and your costs shouldn’t go up when you return to driving.
If you are looking for more details about Suspending Liability rather than dropping your policy, contact our office:
J.M. Insurance & Financial
Our agency’s mission is to recommend coverage and policies meeting each individual need.