How to Suspend or Cancel Car Insurance Temporarily

Auto Insurance, Insurance
How to Save on Car Insurance When You're Away From Home

Deployed military members, missionaries, students studying abroad, and even people serving prison sentences have something in common: They won’t be using their cars for a while. If you’re in a similar position, it could make sense to suspend or cancel car insurance coverage.

If you don’t need car insurance for a while, putting your coverage on hold is a good way to save money. But it isn’t as simple as halting your Netflix subscription or gym membership. There are four main ways to do it: suspend your coverage, cancel your policy, reduce your coverage or exclude yourself from a policy. The option you pick should take several factors into account, including availability, your location, your insurance company, your reason for not needing coverage and the length of time you’ll be away.

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Suspending car insurance coverage

Pros Cons
You won’t pay for insurance while you’re away. The vehicle won’t be covered if anyone wants to drive it.
You won’t have a coverage lapse, which can result in high insurance rates. The vehicle won’t be protected against weather, fire or animal damage, vandalism or theft.
You may be ineligible, depending on your insurer, location and reason for storing your car. Drivers with car loans are also usually ineligible.

Putting your coverage on hold is often the easiest — and least expensive — approach. However, companies that do offer this option frequently offer it solely to deployed members of the military. Geico, for instance, allows military members to suspend coverage if they’re deployed for at least 30 days.

To suspend coverage, you’ll need an affidavit of non-use from your state department of motor vehicles. You’ll also have to find a place to store your car, because you won’t be able to keep it on a public street.

Remember that suspension probably isn’t an option if you have a car loan, as your lender likely requires you to maintain coverage.

Canceling car insurance coverage

Pros Cons
You won’t pay for insurance while you’re away. The vehicle won’t be covered if anyone wants to drive it.
You can cancel your car insurance regardless of your insurer, location or reason for no longer wanting coverage. The vehicle won’t be protected against weather, fire or animal damage, vandalism or theft.
You’ll have a coverage lapse, which could increase your future rates.

If you won’t be using your car temporarily, you can cancel your auto coverage and get a new policy when you return. The process is similar to the one for suspending coverage. You’ll need to get an affidavit of non-use and a place to store your car off the street. Cancellation probably won’t be possible if you have an auto loan, but the option is available through all insurers and for any reason.

However, canceling your insurance could cause you to pay higher rates when you buy a new policy. But if you’re a deployed member of the military, insurer Esurance will let you cancel and reinstate your coverage with no penalty.

According to the company: “So long as you inform Esurance of your deployment beforehand and let us know when you’re ready to reinstate your policy, your time away will not count as a potentially costly gap in insurance coverage.” 

Reducing coverage to a minimum

Pros Cons
The vehicle will be protected against weather, fire or animal damage, vandalism or theft. If you opt just for comprehensive coverage, the vehicle won’t be covered for liability if anyone wants to drive it.
You won’t have a coverage lapse, which can result in high insurance rates. You’ll have to pay for insurance while you’re away.
You can lower your policy limits regardless of your insurer, location or reason for wanting less coverage.

If you’re not eligible for a suspension or cancellation, or don’t want to deal with a lapse, you can cut back your coverage.

“We’ll work with any customer to remove unnecessary coverages to lower their premium while away for an extended period of time,” Esurance spokeswoman Dolleen Cross says.

To start, you can reduce your coverage to the state minimum. This is often a low amount of liability coverage, plus uninsured motorist and personal injury protection in some cases. Though you’ll still pay a premium, it could be substantially lower than before, depending on your original coverage level. Drivers with car loans will have to keep comprehensive and collision coverage as well.

You may be able to scale back even further if you can show that your car is stored and not drivable. Some companies, such as Allstate, allow drivers to suspend liability and collision coverage, while retaining comprehensive coverage, on stored vehicles. That means that cars are protected against damage related to weather, fire, animals, vandalism and theft — but they don’t have the insurance necessary to go out on the roads. To have only comprehensive coverage, you’ll need to file an affidavit of non-use, as you would if you suspended or canceled your coverage.

Insurance company USAA, which is only open to military members and their families, offers deployed military members a storage discount of 60% off all coverages for cars that are kept in a secure location and not driven for at least 30 days. Policyholders can also cut back to just comprehensive coverage with an affidavit of non-use. Geico’s options for military members also include reducing coverage. 

Taking yourself off a policy

Pros Cons
The vehicle will be protected against weather, fire or animal damage, vandalism or theft. You’ll have to pay for insurance while you’re away.
The vehicle will still be legal to drive. You’ll have to add yourself back on the policy once you’re home for at least 30 days.
You can take yourself off a policy regardless of your insurer, location or reason for no longer wanting coverage. You’ll have a coverage lapse, which could increase your future rates.

If you’re not the only person who depends on your car, look into removing yourself from the vehicle’s policy. This could save you money, depending on how your insurer judges your risk compared with other drivers on the policy. You can even still drive the car if you come back for a visit of fewer than 30 days, according to Esurance. But you will have a lapse in your personal coverage, which could impact the rates you’re offered next time you apply for a policy. 

There’s no single insurance option that works best for everyone who’s taking a break from driving. Review each scenario to see what suits your situation.

And if you need to shop around for car insurance, try NerdWallet’s coverage tool.

Aubrey Cohen is a staff writer at NerdWallet, a personal finance website. Email: acohen@nerdwallet.com. Twitter: @aubreycohen.


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