Can I pause my car insurance policy? [2024]

There are many reasons you may want to suspend your car insurance policy. Perhaps you’re going on an extended vacation, so you won’t drive your vehicle for three or four weeks.

If you’re called to military duty or sent to another country for a business trip, it may seem like a waste to pay for car insurance while your vehicle is parked.

Can you put your car insurance on hold? While most auto insurance companies won’t allow you to temporarily suspend your insurance, they may allow you to temporarily reduce coverage. Car insurance is legally required in most states so you cannot put your policy on hold. You can cancel your car insurance policy if you don’t own a car anymore or have bought a new policy elsewhere.

However, you may be able to reduce your coverage if you’re not planning on driving your car for an extended period of time. You will still need to keep your comprehensive coverage to protect your vehicle from damages not related to an auto accident. This way you can avoid a coverage gap and keep any insurance discounts you currently have.

Read the guide below to determine whether suspending your insurance is in your best interest.  We also want to help you avoid penalties for putting your car insurance on hold for the wrong reasons.

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Placing Your Car Insurance on Hold

There may come a time when you will simply have no need for car insurance for a short period of time. That’s when you’ll want to know, “Can I put my insurance on hold?”

Can car insurance be put on hold? You do have the option to cancel car insurance entirely, but it often makes more sense just to put your coverage on hold until you are in a position where you will return to driving.

Read more: How do you write a car insurance cancellation letter?

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Reasons Why You May Need to Put Your Insurance On Hold

Insurance is designed to protect you, your passengers, your assets, other drivers, and pedestrians when you are operating a vehicle.

However, there may be scenarios where you have no intention of driving your vehicle and ultimately no risk of having a liability loss.

Even if you feel like a suspension is warranted, you should know what types of situations temporary policy suspensions are meant for.

Here are some of the most common reasons why a policyholder will suspend coverage with their carrier when it is allowed in the state:

You Sell Your Vehicle and Plan to Buy a Replacement

There is a long list of reasons why your car insurance rates can go up.

One of these reasons is when you have coverage lapses. In addition, if you sell the only vehicle that you own, it might look as if the only option is to cancel your coverage which often leads to losing your prior insurance discount.

Read more: How do you handle car insurance when selling a car?

If you plan on buying a new replacement shortly, however, you can suspend your policy and then call to activate coverage for the new car once you sign your paperwork.

Your Vehicle Will Be in Storage or Parked

If you are putting your vehicle in storage, it’s valid for you to seek an answer to, “Can I put insurance on hold?” it might be a good idea to suspend most coverage but only if the plates are going to be turned in.

Any vehicle that is registered to be driven must have a minimum amount of liability coverage and in some cases, additional coverage options.

Consider keeping your comprehensive coverage so that you still have protection if the vehicle is stolen or vandalized.

If you do not notify the DMV that your vehicle is not operable or will be parked for an extended period, the department will assume your car is being driven.

The DMV will be notified that your liability coverage has been canceled when you request a suspension. This is why you need to surrender your plates first before you suspend your liability coverage.

For more information on storage insurance for cars, see our article on the best storage car insurance.

You Are in the Military and You Are Being Deployed

When you are preparing for deployment, you have a lot to deal with. Auto insurance is one of the many things to consider.

If no one will have access to your cars, suspending the policy is an option.

When you suspend your car insurance, you will need to be sure your car is in storage and that the Department of Transportation knows that you have been deployed.

There may be special requirements for your registration depending on the state that you live in, so be sure to look into state laws and limitations.

Once you do this, you may be able to suspend the following coverage types:

• Liability auto insurance coverage
• Collision coverage
• Uninsured/Underinsured Motorist (UM/UIM) coverage
• Medical Payments
• Personal Injury Protection (PIP)

Read more: What happens to car insurance when I’m deployed overseas?

Benefits of Suspending Your Car Insurance Policy

It might seem like canceling your insurance would be best, but in many cases, it is actually in your best interest to suspend your coverage.

You have to consider when putting coverage on hold will benefit you.

Here are some of the advantages if you choose the appropriate time to do a suspension:

• You can save money on coverage options that you do not need because you are not driving
• You can keep coverage to cover claims for losses to your car while in storage
• You can reactivate coverage with one quick phone call
• You can keep prior car insurance discounts and loyalty credits

Penalties for Suspending Coverage on a Registered Car

The penalties for suspending coverage on a vehicle that has plates are very similar to the penalties for driving without insurance.

Even though you are not physically driving the car, you are failing to comply with the law by maintaining insurance when the car is registered.

The consequences vary but may include:

• Fines issued by the Department of Motor Vehicles
• Suspension of driver’s license
• Reinstatement fees
• SR-22 car insurance requirement on any vehicle you own in the future
• Order to impound the vehicle
• Fines and forced-placed insurance when the vehicle is being financed

If you feel like you have a scenario where a suspension of insurance is merited, call your insurer and see what they allow. You may need to request the suspension in writing and give the effective date that you would like the coverage to stop.

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Contact Your Car Insurance Company

Can you suspend car insurance? All insurance companies have their own rules regarding policy suspensions, so your first step is to give your insurance broker or the company’s customer service line a call to see how to put car insurance on hold.

Inform them of your current or upcoming situation, and ask them what options are available to you.

Some companies may allow you to cancel or temporarily suspend your policy, but they will likely report that information to your state’s Department of Motor Vehicles.

In South Carolina and many other states, companies now report electronically, so the state will know almost automatically. You may need to turn your license plate in until you have reinstated your auto policy or secured a new one.

If a suspension is approved, you aren’t covered if the vehicle is stolen or damaged. Even when parked in a safe place, the weather and other unexpected circumstances may cause damage, leaving you with repairs to cover out of pocket.

Consider Your Alternatives

If your insurance company won’t allow you to suspend your policy, there are some other things that you can do to plan ahead. Some of these options come with consequences, so you have to determine what’s best for your situation.

Drop to Liability-Only Coverage

Many insurance companies will allow you to change your coverage options at any time, and basic liability coverage will keep your vehicle in good standing with most state policies while significantly reducing your insurance premium rate.

You pay less, and you don’t have to worry about giving up your vehicle’s tags until you secure insurance again.

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Opt for Short-Term Insurance Policies

If your insurance policy is due to renew around the time you want to suspend your coverage, consider taking out a short-term or temporary car insurance policy rather than renewing your current policy.

Use online comparison tools to find the lowest price possible, but keep in mind that you may want to keep some protection just in case your vehicle is stolen or damaged while you’re away.

Let Your Policy Lapse

If you don’t have the money to pay for your insurance, you have the option to let a lapse in insurance coverage. When your payment isn’t received, the insurance company will suspend or cancel your policy due to nonpayment.

You can take out a new policy when you’re ready to continue coverage, but this leaves your vehicle unprotected in the meantime.

Consider this your absolute last resort because it involves a lot of risk. Your current insurance company may decline to give you a new policy at a later date, or they may increase your rate because they consider you a higher risk.

In some states, you will lose the ability to register your vehicle and may have to turn in your license plate.

For instance, in New York State, you must forfeit your vehicle’s license plate and may face license suspension if your insurance lapses.

In Pennsylvania, uninsured drivers can lose their license and vehicle tags, and they are required to pay a fine of at least $300. In both states, you can avoid fines and license suspension by turning in your vehicle’s tags before your policy is suspended or canceled.

Car Insurance if You’re Deployed

If you’re deployed for the military and no one will drive your vehicle while you’re away, you should inform your insurance company of the situation as soon as possible.

While most auto insurance companies don’t currently have special programs that allow members of the military to suspend their insurance without consequences, the reason you are suspending your policy may make a big difference when you return and wish to reinstate your policy.

Consider turning in your vehicle’s tags before you cancel or suspend your insurance policy.

Here are some questions to ask yourself before deciding the best course of action in this situation:

• If I can suspend car insurance temporarily, how long can I freeze my car insurance?
• Is there any chance that someone else may need to use your vehicle while you’re deployed? If it’s possible, then you should consider keeping at least liability insurance
• Can you add your car to another trustworthy person’s insurance policy? Paying them for the slight increase in their policy may save you money over paying for your own policy
• Would you benefit from selling your vehicle before you leave? If you expect your deployment to last a year or longer, you may find it much easier to sell rather than maintain the vehicle

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Can I pause my car insurance? Your Best Option

Can you pause car insurance? In many cases, it’s worth paying for your current car insurance even if you aren’t using your vehicle for an extended period of time.

This prevents you from giving up your tags and severing your state registration, and you can get in your vehicle and start driving again at any time.

You don’t have to pay reinstatement fees to the state and wait for them to give you new tags once you’re ready to resume driving.

If that doesn’t work for you for some reason, it’s always best to willingly turn in your tags and ensure your vehicle isn’t driven until you can reinstate your insurance.

You don’t have to worry that your state will take your vehicle’s registration or suspend your license, and you won’t waste money paying fines.

If you are looking for a more affordable policy, use an online tool to help you search for the best coverage.

Start comparing car insurance rates now by entering your ZIP code in our FREE tool below!

We hope we have enlightened you so that you now know the answer to “Can I put my car insurance on hold?

Case Studies: Putting Car Insurance on Hold

Case Study 1: Extended Vacation

John is planning a three-week vacation and won’t be driving his car during that time. He wants to suspend his car insurance to save money. However, his insurance company doesn’t allow policy suspension. John decides to temporarily reduce his coverage to liability only to keep his car in good standing with state policies while reducing his premium rate.

Case Study 2: Military Duty

Sarah is being deployed for military duty overseas for six months. She won’t be using her car during this period and wants to suspend her car insurance. Sarah contacts her insurance company, but they don’t offer a specific policy suspension option for military members. Instead, they suggest Sarah turn in her vehicle’s tags until she reinstates her policy or secures a new one.

Case Study 3: Financial Constraints

Mark is facing financial difficulties and can’t afford to pay his car insurance premium for a month. He wants to avoid an insurance lapse for nonpayment. Mark reaches out to his insurance company to inquire about policy suspension, but they don’t provide this option.

As an alternative, Mark considers letting his policy lapse. However, he understands the risks involved, such as being uninsured and potentially facing penalties, fines, and license or registration suspensions.

Case Study 4: Reducing Coverage

Emily is taking a three-month sabbatical and won’t be driving her car during that time. She wants to reduce her car insurance coverage to save money.

Emily contacts her insurance company, and they allow her to temporarily reduce her coverage while keeping comprehensive car insurance coverage to protect her vehicle from damages not related to an auto accident. This way, Emily avoids a coverage gap and retains any insurance discounts she currently has.

Case Study 5: Vehicle Replacement

Sarah decides to sell her car and plans to buy a new one in the near future. Instead of canceling her car insurance, she contacts her insurance company to inquire about putting her coverage on hold. They inform her that she can suspend her policy and reactivate coverage for the new car once she completes the purchase.

Case Study 6: Vehicle in Storage

Michael needs to store his vehicle for an extended period. He wants to reduce his insurance costs during this time but still wants protection against theft or vandalism. He contacts his insurance company and learns that he can suspend most coverage while keeping comprehensive insurance intact.

By suspending his liability coverage and keeping comprehensive, Michael ensures his vehicle is protected while it’s in storage.

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