Temporarily Suspending Your Car Insurance

STORAGE INSURANCE / SUSPENDED LIABILITY

Going away for an extended vacation? Living for military deployment? Garaging your convertible for winter? All of the above trigger a question: do you need the insurance for the vehicle you don’t use? 

If you have a car loan or your vehicle is leased, you are required to carry full insurance until it’s fully paid off. If you already own your car, you can consider three options:

1. Suspending the liability coverage

2. Unregistering vehicle and canceling your policy

3. Reducing the coverage.

Suspending the Liability Coverage
“Storage insurance” may be utilized when you store your vehicle away from the public road. Not all insurance companies will allow it, and if they do, they will let you suspend the Liability Coverage only if you have more than one vehicle on the policy (at least one car needs to remain active). Most likely, you will be required to keep Comprehensive Coverage in case your vehicle gets stolen or suffers damage while in storage. Suspending the Liability Coverage may violate your state requirement to maintain the minimum insurance. If the insurance company reports the suspension of liability coverage to the DMV, you may face the fine or even suspension of your driver license. Check with your local Motor Vehicle what your state law says about it.

Unregistering vehicle and canceling your policy
You can surrender the plates to the DMV and cancel the policy, but creating a lapse in coverage may result in much higher premium once you decide to re-activate it. Some carriers waive this price hike for the deployed military members.

Reducing the coverage
Your best option to save money is to keep the policy active but lower the Liability Coverage to the minimum required by the state and cancel the Collision Coverage entirely. 

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