Reduce, Pause, or Cancel Your Car Insurance

In some cases, you might want to pause or cancel your car insurance on a car you aren’t actively using. It can be a great way to cut down on costs for a few months and save money that could be better used in another area of your life.

Some car insurance companies will allow you to suspend the car insurance for a few months while in others you will need to cancel it completely. It’s a common way for people to save money when they are having a financial hardship. Many companies will be lenient if you explain to them the situation and tell them it’s for economic reasons.

Most car insurance companies will make you call or appear in an office to pause or cancel your plan. This is for security purposes because they want to ensure that you are the one canceling the plan and not someone else.

Reducing Your Plan

This involves minimizing your plan to only pay for the car insurance parts that are required by your state. It’s called a minimum coverage option. Most states require you to have liability insurance, personal injury protection, and medical payments coverage.

You might want to also keep comprehensive coverage if you are storing the vehicle. This will make sure that the car is covered if it is stolen or is damaged from falling objects. It will also protect the car from vandalism.

Make sure to contact the DMV if you only have comprehensive coverage and not liability coverage. This way they know no one is driving the car and you only have insurance to protect it from non-driving damage.

They will usually make you file an affidavit so that it’s on file somewhere that no one will be driving the car.

Pausing Your Car Insurance

This allows you to stop paying the car insurance momentarily for a few months while you get your finances together. This allows you to keep from experiencing coverage lapse. It’s also more cost-effective than canceling your insurance and then reapplying for a new one at a later time.

Pausing car insurance is only allowed by some companies and usually under certain circumstances. You will also need to go to the DMV and get an affidavit of non-use. This allows you to legally stop paying car insurance while you are not driving the car.

This isn’t usually an option if you have a car loan. Lenders almost always require you to have coverage but check your agreement to see the specific protocols.

Canceling Your Plan

This will also not work if you have a car loan. Canceling completely ends your insurance. If you decide to start driving again, you will need to look for a new policy and resign a plan.

This also requires a DMV visit to receive a form to say you will not be driving the car. This will create a lapse in your insurance history and might may your insurance more expensive when you begin to drive again.