As car insurance is a must-have for car owners, carrying auto insurance is not an unfamiliar phenomenon. However, paying for something month after month on a yearly basis with no particular end in sight can be financially draining, which is why some policyholders might seek to purchase insurance policies with lower rates or just cancel their policy entirely.
What many don’t know, though, is that you can put a pause on your current policy instead of exploring a new one or canceling it completely.
Reasons for Putting a Pause on Your Car Insurance
Rather than having a record of non-payment for a period of time due to financial struggles or the fact that you rarely use your car every single day, it is better to opt for the temporary suspension of your car insurance policy.
Some of the reasons or lifestyle changes that could cause you to put a pause on your car insurance coverage are as follows:
• A long vacation where you won’t need your car for weeks or months and it’ll be parked at your home for that duration.
• Military service accompanied by a temporary relocation abroad.
• Vehicle repairs or complete breakdown that makes your car non-usable.
However, before deciding to suspend your car insurance, make sure you reach out to an agent directly to understand more about the procedure and determine if it’s the right choice for you.
Suspending vs. Cancelling Your Car Insurance
While the suspension of your car insurance might seem like a good idea, there are some factors that may deter you from making that choice.
For example, people with car loans will most likely not get the option to pause their policy. They will have to choose between getting cheaper coverage or canceling their policy entirely. However, if there’s a chance to get suspension instead, it’s better than total cancellation as there won’t be a need to worry about a lapse in auto coverage.
Also, the cancellation of your policy might subject you to spending your own money on expenses such as car vandalism.
Nonetheless, most insurance providers have become a little more sympathetic ever since the COVID-19 pandemic and may be able to offer payment plans that allow you to keep your coverage in place at a lower rate.
Ways to Avoid Paying Higher Rates Without Suspension or Cancellation and Their Risks
The first way to avoid suspension or cancellation is by selecting higher deductibles for your collision and comprehensive coverage. However, this will require payment of larger amounts from your own pocket in case of an accident.
The second is the removal of the two types of coverage and pay for liability insurance only, but it can be dangerous if you’re still driving your vehicle.
Lastly, you could lower your liability limits such that your auto policy would pay less than normal in the event of an accident.
If you would like to learn more about car insurance coverage or need advice on your existing one, contact our experts at CF&P Insurance Brokers. We can help assess your coverage needs and close any protection gaps. Call us at (925) 956-7700 today!