Can You Put Your Car Insurance on Hold?

Many individuals consider adjusting their car insurance coverage temporarily, often called “putting it on hold,” when their vehicle will not be in active use. This involves temporary modifications to an existing policy rather than outright cancellation, aligning coverage with current needs when a vehicle is garaged for an extended period.

Understanding Car Insurance Suspension

Car insurance suspension is a temporary reduction or removal of certain coverages while keeping others active. This arrangement is sometimes referred to as “storage insurance” or “comprehensive-only coverage.” Typically, coverages related to active driving, such as liability and collision, are suspended because the vehicle will not be on public roads. Liability coverage protects against costs if you cause an accident, while collision covers damage to your own vehicle from an accident.

Comprehensive coverage is often retained or becomes the sole coverage maintained during a suspension period. This coverage protects against non-driving risks like theft, vandalism, fire, natural disasters, and damage from falling objects or animals. Comprehensive coverage is particularly relevant if the vehicle is financed or leased, as lenders often require it to protect their investment. The primary benefit of suspending certain coverages is to significantly reduce premium costs while the vehicle is not in use, potentially lowering premiums by as much as 80%.

Situations for Suspending Coverage

Car insurance suspension is an option when a vehicle will not be driven for an extended duration. Common scenarios include extended travel, such as long vacations, sabbaticals, or overseas deployments, where the vehicle remains unused for months.

Seasonal vehicle use, applicable to classic cars, recreational vehicles, or convertibles stored during off-seasons, is another scenario. Vehicles undergoing long-term repairs or restoration projects are also candidates, as they are immobile and not exposed to typical road risks. A spare vehicle temporarily not in use can also benefit from reduced active coverage. Suspension options and eligibility conditions vary among insurance providers and depend on state regulations.

Process for Suspension and Reinstatement

Initiating a car insurance suspension requires direct communication with your insurance provider. Policyholders typically contact their insurer via phone, online portals, or through an agent to discuss their intent to suspend coverage. During this discussion, provide the desired effective dates for the suspension and the reason for the temporary change. Confirm the specific coverages that will remain active, such as comprehensive coverage, and understand the adjusted premium.

Obtain written confirmation of the policy change, detailing the period of suspension and the remaining coverages. When the vehicle is ready to be driven again, reinstating full coverage is essential before it operates on public roads. The reinstatement process involves contacting the insurer to request the return of full coverage, which may entail confirming updated mileage or other vehicle details. Confirm the new premium and the exact effective date of the reinstated full coverage to avoid any gaps in protection.

Maintaining Compliance During Suspension

Maintaining compliance during a car insurance suspension involves understanding both legal requirements and practical considerations. In most jurisdictions, a minimum level of insurance is mandated for any registered vehicle, even if it is not actively driven. Driving a vehicle with suspended liability coverage can lead to severe legal consequences, including substantial fines, suspension of driving privileges, and even vehicle impoundment.

Policyholders should also review their state’s Department of Motor Vehicles (DMV) regulations regarding continuous insurance requirements for registered vehicles. Some states may require notification, such as filing an “affidavit of non-use,” if insurance is suspended, or may suspend registration if a lapse in coverage occurs. For vehicles that are financed or leased, contractual agreements almost always require maintaining full coverage, including collision and comprehensive insurance, throughout the loan or lease term. Failing to uphold these requirements can violate the agreement and result in financial penalties or force-placed insurance by the lender.