Do You Need Auto Insurance if You’re Not Driving?

Can You Pause Your Car Insurance if You're Not Driving?

Typically, a motorist pauses their coverage because they won't be driving their car for a certain period, such as 30 days or more. Being able to pause your car insurance depends on your insurer, your state and your lender (if you're financing your car).

Your insurer may not allow you to pause your auto insurance. Or the laws in the state where you drive may prohibit you from pausing it.

Even if your insurer does permit it, you may be required to pause your coverage for a certain period, such as 60 days or more, and you might not be able to pause your coverage more than once a year.

Furthermore, you may need to submit an "affidavit of non-use" to your state's department of motor vehicles if you don't plan to drive your car on your state's roads for a certain period of time, such as 90 days.

Even if you're pausing your car insurance, you still may need to carry state-mandated liability coverage. Or pausing your coverage might mean keeping comprehensive coverage while temporarily getting rid of liability, collision, medical payments and uninsured/underinsured motorist coverage. Comprehensive coverage applies to fixing vehicle damage caused by something other than a collision, such as a fire or tornado, or replacing a stolen car.

You generally can't pause or cancel your auto insurance policy if you're financing your car through a loan or lease. Even if you're temporarily not driving your car, the lender may insist that you carry a minimum amount of comprehensive and collision coverage, along with the minimum amount of state-required liability insurance.

Keep in mind that if you let your policy lapse—meaning you no longer maintain state-mandated liability coverage—your state's department of motor vehicles might suspend your vehicle registration and your driver's license. In addition, you could be arrested or ticketed, and your car could be impounded.

Pros and Cons of Pausing Your Car Insurance

Pausing your car insurance involves both pros and cons.

Pros of Pausing Your Car Insurance

• Avoiding cancellation: Pausing your car insurance, rather than canceling it, puts you in better standing with insurers. Canceling your coverage could make you a riskier driver in the eyes of an insurer and might lead to higher insurance premiums.
• Cutting costs: Pausing your policy may save money if you aren't planning to drive for a while.

Cons of Pausing Your Car Insurance

• Taking on more risk:If you temporarily drop some or all of your coverage, you may be jeopardizing your finances. For instance, if you temporarily go without comprehensive coverage and your car is stolen, you could be stuck paying for a new car out of your own pocket.
• Re-applying for coverage: Your insurer may require that you apply for a new policy after pausing coverage, depending on what your insurer's rules are and how long your coverage was frozen. This could impact the premiums you pay when you resume coverage.

What Types of Car Insurance Coverage Are Required?

The types of car insurance you're required to buy depend on your state's laws and your lender's rules. Here's a rundown of the kinds of coverage that you may need.

• Liability: Most states require auto liability coverage. Liability coverage kicks in when you cause an accident that injures someone or damages their car or property.
• Collision: Collision coverage applies to damage to your car if you hit another car, an object or an animal. Lenders typically require collision coverage if you're financing your car.
• Comprehensive: Comprehensive coverage takes effect when your car is damaged in, say, a fire or tornado, or when it's stolen. Lenders generally require collision coverage if you're financing your car.
• Uninsured/underinsured motorist: If a driver who's uninsured or underinsured causes an accident, this coverage pays for treatment of bodily injuries or repair of property damage. Some states require this coverage.
• Medical payments/personal injury protection: Medical payments coverage pays medical bills when you or your passengers are involved in an accident. Some states offer personal injury protection (PIP) rather than medical payments coverage. PIP may extend beyond medical expenses to cover lost wages and other costs arising from an accident. Your state may require you to carry medical payments coverage or PIP coverage.

Ways to Reduce Car Insurance Costs

You can take advantage of several ways to reduce car insurance costs. Here are five of them.

1. Reduce coverage. Getting rid of coverage you don't need can trim your auto insurance premium. For instance, you may want to ditch optional coverage for things like rental cars or roadside assistance.
2. Ask about discounts. Car insurance companies generally offer an array of discounts. You may, for example, qualify for discounts if you've gone accident-free over a certain period or you've been with the same insurer for a number of years.
3. Bundle your coverage. Some insurers will decrease your premium if you buy two kinds of insurance from them, such as auto and home.
4. Boost your deductible. Bumping up your deductible from, say, $200 to $500 could lower your car insurance premium.
5. Shop around. Compare quotes from at least three car insurance companies to find the right coverage at the right price.

The Bottom Line

Pausing your auto insurance may be a good move if you plan not to drive your car for a while. The biggest benefit of this could be chopping your auto insurance premium. Keep in mind, though, that your state or your insurer may not let you pause coverage. In addition, you may be required to carry a minimum amount of certain kinds of coverage.

If you're in the market for car insurance, be sure to compare quotes using Experian's insurance tool. View coverage from multiple insurance companies to make sure you're getting the best price for the coverage you need.