Canceling Auto Insurance for Few Months? Any down sides?

[a010z]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

[michaeljc70]

If someone steals your car and kills someone the family will most likely sue you since the deadbeat thief has nothing. If someone steals the car, assuming you carry comprehensive, you won't be paid anything. If the car is damaged somehow, same thing (which can happen even in a garage).

It seems like too much trouble with some risk (albeit low) for what is likely less than a couple hundred bucks.

[delamer]

In my state, you are required by law to have insurance on a vehicle registered in your name.

If you cancel the insurance, the insurer will notify the state department of motor vehicles and you’ll be fined.

(We were fined once when we cancelled the insurance on a vehicle before we returned the tags.)

[alex_686]

You can see about reduced mileage or storage insurance. I know some people who put their sports cars away for the winter. There are hurdles to prove your car is in storage.

[Nummerkins]

Don't cancel, just look into reducing. Most insurance asks if you have had a gap in coverage when you shop. Doesn't matter why, huge red flag to them.

[a010z]

Thanks for the replies! I will look into reducing.

[azianbob]

Perhaps you can lower the miles to like 1,000 a year and remove the collision piece and just go to liability

[JaneyLH]

We have 3 cars and State Farm Insurance. They have the capability of suspending use without cancelling, so you don't have to turn in plates and drop registration. You can make a phone call and return to use or swap cars, same day service. It costs about 75% less than your normal insurance payment! No reason not to do it if your insurance company has a similar capability.

[FrugalInvestor]

I've done this many times in the past for cars only used seasonally. Where I've lived (multiple states) my insurance company suspends all coverage with the exception of comprehensive which covers non-collision related claims (i.e. tree falls on garage). Comprehensive coverage is cheap relative to full coverage. I've always been able to handle this with only a phone call both to suspend and reinstate full coverage.

[stoptothink]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

Let me tell you a little story...5yrs ago my son was about to be born and my wife was going to stay home with him (and our daughter). We decided we no longer needed a 2nd car and were giving it to my brother in-law. I thought I had told her it was not insured so that she couldn't drive it until her brother physically had possession of it. Literally the day after I took it off the insurance my wife decided she needed to go to the store less than a mile away, she rear-ended someone (who had stopped in the middle of an intersection on a yellow) on the way home. The accident occurred at <20mph and at first glance there appeared to be no damage whatsoever...well, that situation ultimately cost us ~$12k out-of-pocket, my wife lost her license, and we had to have SR-22 for 3yrs. In 18yrs of driving, that is the one and only accident my wife has ever been in.

If you are going to take it off the insurance, you better be darn sure nobody drives it.

[smitcat]

In my state, you are required by law to have insurance on a vehicle registered in your name.

If you cancel the insurance, the insurer will notify the state department of motor vehicles and you’ll be fined.

(We were fined once when we cancelled the insurance on a vehicle before we returned the tags.)

Yes - exactly. You would also need to cancel the state registration and store the car/truck completely on private property until you choose to register and re-insure that vehicle.

[New Providence]

If someone steals your car and kills someone the family will most likely sue you since the deadbeat thief has nothing. If someone steals the car, assuming you carry comprehensive, you won't be paid anything. If the car is damaged somehow, same thing (which can happen even in a garage).

It seems like too much trouble with some risk (albeit low) for what is likely less than a couple hundred bucks.

Yes, I agree. Penny wise, Pound foolish.

[Alan S.]

We have 3 cars and State Farm Insurance. They have the capability of suspending use without cancelling, so you don't have to turn in plates and drop registration. You can make a phone call and return to use or swap cars, same day service. It costs about 75% less than your normal insurance payment! No reason not to do it if your insurance company has a similar capability.

If suspending use drops you from 2 vehicles to 1, what happens to your multi car discount?

[smitcat]

If someone steals your car and kills someone the family will most likely sue you since the deadbeat thief has nothing. If someone steals the car, assuming you carry comprehensive, you won't be paid anything. If the car is damaged somehow, same thing (which can happen even in a garage).

It seems like too much trouble with some risk (albeit low) for what is likely less than a couple hundred bucks.

"If the car is damaged somehow, same thing (which can happen even in a garage)."
Most home insurance policies would cover that - please check.

[JaneyLH]

We have 3 cars and State Farm Insurance. They have the capability of suspending use without cancelling, so you don't have to turn in plates and drop registration. You can make a phone call and return to use or swap cars, same day service. It costs about 75% less than your normal insurance payment! No reason not to do it if your insurance company has a similar capability.

If suspending use drops you from 2 vehicles to 1, what happens to your multi car discount?

We pay about 25% of what we used to pay for each of the 2 cars we suspended. Our multi-car discount wasn't changed. So if our cars burn up, there is still coverage for that and we don't have to go through the hassle of going to the DMV to de-register and re-register. And if we decide we need to use the convertible instead of the SUV, we can call our agent in the morning and immediately hop in the car. I believe there would also be a problem with our umbrella policy if we completely dropped insurance on a vehicle, but I didn't pursue that because I wasn't going to do it.

[ballons]

• Check your state laws. I've seen a few that if you drop insurance but still have a vehicle registered, your license will eventually get suspended once that insurer reports to the state.
• You may get rate jacked for lacking continuous coverage.

This really isn't worth the risk to save a few dollars. If your budget is hurting reduce coverage, raise deductible, shop around for different insurance, or look to ditch one of your vehicles.

[Alan S.]

If this crisis drags on for months, and total miles driven nationwide drops 70%, there should not be a huge windfall for the insurance companies while most other businesses implode. The industry should get together and come up with an equitable solution before the insurance commissioners in every state decide to take some independent action.

[Trader Joe]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

I have done the same as you are proposing before and I am doing the same now. All upside (money saved).

[02nz]

Every state I've lived in requires insurance for a registered motor vehicle and will come after you if you let the insurance lapse. Some (like CA) may have a "not operated" status, which waives this requirement, but I'm not familiar with the details of how to put a vehicle into (and then get it out of) this status.

There are insurance companies that charge by the mile. I use Metromile and have been satisfied with it. It's around $50/mo base + 8 cents per mile for my roughly $30K vehicle (obviously these figures will vary, but this is to just give you an idea). This seems a good way to cut down on the cost of insurance when you're not driving much, without dropping insurance altogether.

[02nz]

If this crisis drags on for months, and total miles driven nationwide drops 70%, there should not be a huge windfall for the insurance companies while most other businesses implode. The industry should get together and come up with an equitable solution before the insurance commissioners in every state decide to take some independent action.

What, in which they send say 50% of their profits in rebate checks out of the kindness of their hearts? I'm not holding my breath. And what legal basis would state governments have to take action like that?

[michaeljc70]

If someone steals your car and kills someone the family will most likely sue you since the deadbeat thief has nothing. If someone steals the car, assuming you carry comprehensive, you won't be paid anything. If the car is damaged somehow, same thing (which can happen even in a garage).

It seems like too much trouble with some risk (albeit low) for what is likely less than a couple hundred bucks.

"If the car is damaged somehow, same thing (which can happen even in a garage)."
Most home insurance policies would cover that - please check.

Most homeowners insurance policies include an exclusion for motor vehicles. I have Progressive and motor vehicle are specifically excluded under the "Property Not Covered" section. Please check yours.

[clown]

If your relationship with your insurance company is good, ask them what they would recommend. If you view your insurer as an adversary, consider switching.

[Cubicle]

There was a news article floating around recently that car insurers should reduce rates across the board because of the significant drop in miles society is driving. A representative stated they'd "look into it". I hope the state insurance commissioners & attorney generals would look at this.

[FrugalInvestor]

There was a news article floating around recently that car insurers should reduce rates across the board because of the significant drop in miles society is driving. A representative stated they'd "look into it". I hope the state insurance commissioners & attorney generals would look at this.

My insurer (State Farm) offers a lower rate for a vehicle that I drive an average of less than 7,000 miles/year. I've qualified for this rate in the last two states I've lived in.

[helloeveryone]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

I never hear of reducing as others have posted but it's very informative stuff!I google allstate which is who we have and they actually have a q&a section on this.

https://www.allstate.com/tr/car-insuran ... orage.aspx

[smitcat]

If someone steals your car and kills someone the family will most likely sue you since the deadbeat thief has nothing. If someone steals the car, assuming you carry comprehensive, you won't be paid anything. If the car is damaged somehow, same thing (which can happen even in a garage).

It seems like too much trouble with some risk (albeit low) for what is likely less than a couple hundred bucks.

"If the car is damaged somehow, same thing (which can happen even in a garage)."
Most home insurance policies would cover that - please check.

Most homeowners insurance policies include an exclusion for motor vehicles. I have Progressive and motor vehicle are specifically excluded under the "Property Not Covered" section. Please check yours.

Ours has always has covered vehicles.
Additionally if you car is stolen your insurance company will not pay for damages incurred by the thief - and neither will you be required to cover damages.

[UpperNwGuy]

OP, can't you think of a better way to save money?

[Stinky]

Thanks for the replies! I will look into reducing.

Yes, this is the answer. Tell the agent about your plans for the car, and ask them what they can do to reduce cost.

Then take that advice.

[mouses]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

Let me tell you a little story...5yrs ago my son was about to be born and my wife was going to stay home with him (and our daughter). We decided we no longer needed a 2nd car and were giving it to my brother in-law. I thought I had told her it was not insured so that she couldn't drive it until her brother physically had possession of it. Literally the day after I took it off the insurance my wife decided she needed to go to the store less than a mile away, she rear-ended someone (who had stopped in the middle of an intersection on a yellow) on the way home. The accident occurred at <20mph and at first glance there appeared to be no damage whatsoever...well, that situation ultimately cost us ~$12k out-of-pocket, my wife lost her license, and we had to have SR-22 for 3yrs. In 18yrs of driving, that is the one and only accident my wife has ever been in.

If you are going to take it off the insurance, you better be darn sure nobody drives it.

I gave my two ancient cars to a vehicle donation program a year or so ago. I did not cancel the insurance until I had the donation title paperwork clutched in my hand, had visited the registry of motor vehicles to be sure I was no longer considered the owner of the cars, etc.

[firebirdparts]

I collect cars and I do it every year, many years. My agent would always suggest dropping to "comprehensive only" for about $5 a month, and that's probably worthwhile. Please grasp here that I can afford these cars. if somebody did steal one, it wouldn't affect my lifestyle at all.

Your state will probably "come after you" and they may have costs built into the system to punish you at a level that is above what you'd save on insurance. You should check into that, if you can. The DMV may be out of the office. I don't know what state you live in, so I can't comment further.

[Cubicle]

Echoing firebirdparts's comments. I drop insurance on some of my cars. Last year I was all clear. This past winter they caught me. I had to send in that I re-instated my coverage. That's all. But it did legitimately worry me. I'm gonna do it again this winter.

The strange thing though... they only caught some of the cars I dropped coverage on. I have the same company & policy number & policy number on all of them.

[michaeljc70]

I find these posts advocating breaking the law to save what is really very little money astonishing. If you can afford to have a car you don't use you can afford insurance on it.

[bayview]

I find these posts advocating breaking the law to save what is really very little money astonishing.

Not to mention against forum rules...

Once it has been pointed out that in most (all?) states, you are required to insure registered vehicles, no one should be posting suggestions not to insure.

OP has already replied that he will reduce coverage.

[prad81]

Go with a pay-per-mile insurance policy. I am with Metromile and my estimated bill for this month for two cars (2 and 3 years old) is $60 (includes base + per mile charge) as I hardly drove them.

[smitcat]

I find these posts advocating breaking the law to save what is really very little money astonishing.

Not to mention against forum rules...

Once it has been pointed out that in most (all?) states, you are required to insure registered vehicles, no one should be posting suggestions not to insure.

OP has already replied that he will reduce coverage.

It is not against any laws to own vehicles that are not insured or under current registration unless they are driven on public roads. When in storage and/or stored safely on private property you do not need to have these in place.

[michaeljc70]

I find these posts advocating breaking the law to save what is really very little money astonishing. If you can afford to have a car you don't use you can afford insurance on it.

It is not against any laws to own vehicles that are not insured or under current registration unless they are driven on public roads. When in storage and/or stored safely on private property you do not need to have these in place.

It is against the law in many states (mine included) to have a car registered (plates) and not insured. That is what the topic is about, not cars that aren't registered you may have in a barn for years to restore.

[mrc]

It is not against any laws to own vehicles that are not insured or under current registration unless they are driven on public roads. When in storage and/or stored safely on private property you do not need to have these in place.

My state requires return of the tags BEFORE you cancel the insurance. Quite a pain for a short-term lapse.

Return your license plates to any MVA branch office before you cancel your vehicle insurance.

[smitcat]

I find these posts advocating breaking the law to save what is really very little money astonishing. If you can afford to have a car you don't use you can afford insurance on it.

It is not against any laws to own vehicles that are not insured or under current registration unless they are driven on public roads. When in storage and/or stored safely on private property you do not need to have these in place.

It is against the law in many states (mine included) to have a car registered (plates) and not insured. That is what the topic is about, not cars that aren't registered you may have in a barn for years to restore.

There are numerous examples of where you can lapse insurance and it would be perfectly legal, a few examples:
There are states which do not require insurance to operate on public roads. There are states which have rules for some vehicles where you can keep the plates and registrations without insurance or penalty as long as you do not take them on public roads while they are uninsured.
"not cars that aren't registered you may have in a barn for years to restore."
Or vehicles stored in a garage that are used seasonally which can have both the insurance and registration surrendered - as I have done many times.

[smitcat]

It is not against any laws to own vehicles that are not insured or under current registration unless they are driven on public roads. When in storage and/or stored safely on private property you do not need to have these in place.

My state requires return of the tags BEFORE you cancel the insurance. Quite a pain for a short-term lapse.

Return your license plates to any MVA branch office before you cancel your vehicle insurance.

Asa I posted - you can cancel the registration and the plates along with the insurance if you want to lapse usage of the vehicle for some reason.

[FireFool]

A good deal of the reason for the responses you're getting being all over the place is that auto insurance is regulated at a state level. The registration/mandatory insurance regulations will vary depending on what state you live in. Not knowing the state you live in I can't share the nuances I might know for your state. Across all states if you have a loan/lease outstanding on the vehicle your lender will require you to have coverage on the vehicle. You also want to make certain the drivers in your household are insured on other vehicles as a drivers with lapses in insurance will find buying insurance later when they've had a lapse to be markedly more expensive (drivers who maintain continuous coverage are better risks and are priced accordingly). The one thing I can share though is if you drop liability coverage altogether on a vehicle you should make certain that vehicle is inoperable to deter it's inadvertent use (e.g. disconnect/remove the battery).

[Mr. Rumples]

The other caveat is storage. Some jurisdictions, like mine, have ordinances which are strictly enforced regarding having vehicles without plates on private property. In mine, it can't be visible from a public right of way or from anyone else's property; that includes even if its under a tarp.

Also, if the plates are surrendered I'd find out if they are tied into the local personal property taxes and if something needs to be done in that regard. In my state, VA, that is a step many overlook, but the taxing authority needs to be made aware of what's called "a change in vehicle status." Since we get state tax relief (PPTRA) on personal property taxes, that is tied into the state's taxing authority also.

[Ferdinand2014]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

I convert my insurance to storage insurance over the winter on my track car. I do not cancel it however.

[Gooch1226]

Hi all,
We have 2 cars but because of the shelter in place, we never use 1 of the car.
And it looks like we won't need to use 1 of the car for at least 2 more months.

So I am thinking of canceling my auto insurance for at least 2 months, then add the vehicle back to insurance after that.
Is there any downside to doing this? Any risks that I am not thinking about?

Let me tell you a little story...5yrs ago my son was about to be born and my wife was going to stay home with him (and our daughter). We decided we no longer needed a 2nd car and were giving it to my brother in-law. I thought I had told her it was not insured so that she couldn't drive it until her brother physically had possession of it. Literally the day after I took it off the insurance my wife decided she needed to go to the store less than a mile away, she rear-ended someone (who had stopped in the middle of an intersection on a yellow) on the way home. The accident occurred at <20mph and at first glance there appeared to be no damage whatsoever...well, that situation ultimately cost us ~$12k out-of-pocket, my wife lost her license, and we had to have SR-22 for 3yrs. In 18yrs of driving, that is the one and only accident my wife has ever been in.

If you are going to take it off the insurance, you better be darn sure nobody drives it.

Geez that is a messed up story. What timing huh?

[JGoneRiding]

Every state I've lived in requires insurance for a registered motor vehicle and will come after you if you let the insurance lapse. Some (like CA) may have a "not operated" status, which waives this requirement, but I'm not familiar with the details of how to put a vehicle into (and then get it out of) this status.

There are insurance companies that charge by the mile. I use Metromile and have been satisfied with it. It's around $50/mo base + 8 cents per mile for my roughly $30K vehicle (obviously these figures will vary, but this is to just give you an idea). This seems a good way to cut down on the cost of insurance when you're not driving much, without dropping insurance altogether.

I have yet to figure out how that is a good deal unless the only thing you are insuring is a car??

We pay $101 per month for 2 vehicles with full coverage. So I would say a better price and fairly low deductibles. But we have discounts for "multiline"

[michaeljc70]

Every state I've lived in requires insurance for a registered motor vehicle and will come after you if you let the insurance lapse. Some (like CA) may have a "not operated" status, which waives this requirement, but I'm not familiar with the details of how to put a vehicle into (and then get it out of) this status.

There are insurance companies that charge by the mile. I use Metromile and have been satisfied with it. It's around $50/mo base + 8 cents per mile for my roughly $30K vehicle (obviously these figures will vary, but this is to just give you an idea). This seems a good way to cut down on the cost of insurance when you're not driving much, without dropping insurance altogether.

I have yet to figure out how that is a good deal unless the only thing you are insuring is a car??

We pay $101 per month for 2 vehicles with full coverage. So I would say a better price and fairly low deductibles. But we have discounts for "multiline"

I agree. We drive only 5k miles between 2 cars a year and our regular insurance was cheaper than the pay per mile insurance for us. If you use your car a couple of times a month maybe it is worth it.

[Stanczyk]

There are absolutely no downsides if you go for storage insurance. I did that myself for one of my cars a few days ago. I also did that before during extended stays abroad. Besides, you can undo that with one phone call.

[dtee]

Thank you for this thread. Pick up the idea of reducing my driving due to this Covid-19. I called up Geico and was able to reduce my auto insurance by $50. Thanks for the tips Bogleheads!

[talzara]

There are insurance companies that charge by the mile. I use Metromile and have been satisfied with it. It's around $50/mo base + 8 cents per mile for my roughly $30K vehicle (obviously these figures will vary, but this is to just give you an idea). This seems a good way to cut down on the cost of insurance when you're not driving much, without dropping insurance altogether.

I have yet to figure out how that is a good deal unless the only thing you are insuring is a car??

We pay $101 per month for 2 vehicles with full coverage. So I would say a better price and fairly low deductibles. But we have discounts for "multiline"

You cannot compare rates like that. You do not live in the same house or drive the same car. You're probably not the same age and marital status. Up to 50 rating variables are used to calculate an auto insurance premium.

On top of that, each company prices differently. If you get quotes from multiple companies, it is not unusual for rates to vary by a factor of 3.

The only way to see the effect of pay-per-mile insurance is to compare quotes at the same company. There are very few companies that offer both traditional and PPM auto insurance. Allstate is the biggest one, but even Allstate is not offering it across the country yet.

[talzara]

I agree. We drive only 5k miles between 2 cars a year and our regular insurance was cheaper than the pay per mile insurance for us. If you use your car a couple of times a month maybe it is worth it.

Pay-per-mile insurance breaks even at about 7,000 miles per year, compared to a traditional auto insurance policy with the same rate structure.

Since you're not seeing savings at 5,000 miles, your insurance company is pricing more aggressively than the pay-per-mile insurance company. Auto insurance rate structures are very complex. Any one of 50 rate factors could give you a big enough discount to offset the PPM savings.

[talzara]

My insurer (State Farm) offers a lower rate for a vehicle that I drive an average of less than 7,000 miles/year. I've qualified for this rate in the last two states I've lived in.

State Farm's low-mileage discount is only about 20%, except in California.

Once you go below 7,500 miles, there is no further discount. Driving 1 mile a year costs the same as driving 7,500 miles a year.

Only the Usage-Based Insurance (UBI) and Pay Per Mile (PPM) policies offer steeper discounts. However, that usually involves switching companies, except in a few states where Allstate offers both traditional and PPM policies.