Can I put my car insurance on hold?

There may come a time where you will simply have no need for car insurance for a short period of time.

You do have the option to cancel the coverage 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.

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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.

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 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.

— 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:

• Personal Liability
• Collision
• Uninsured Motorist Protection
• Underinsured Motorist Protection
• Medical Payments
• Personal Injury Protection

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 cover with one quick phone call
• You can keep prior insurance discounts and loyalty credits

Penalties for Suspending Cover on a Registered Car

The penalties for suspending cover 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 Vehicle
• Suspension of driving license or driver license
• Reinstatement fees
• SR-22 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.

Case Studies: Putting Car Insurance on Hold

Case Study 1: 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 2: 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.

Case Study 3: Military Deployment

David, who is in the military, is being deployed and won’t have access to his car. He decides to suspend his car insurance policy since no one will be using his vehicle. David notifies his insurance company about his deployment and follows the necessary procedures to suspend his coverage. By doing so, he avoids paying premiums for a vehicle that won’t be driven and complies with state laws and regulations.

If you have already canceled your coverage, you can start comparing car insurance rates by entering your zip code in our FREE tool below!