A Lapse in Coverage
If, for any reason, you are not going to use a vehicle for a certain period of time, and you decide to cancel insurance, it will result in what’s called a “lapse in coverage.” A lapse in coverage is a serious thing and makes you a higher risk to insure.
Insurance companies have no way of knowing that you were out of the country for the past three months and that’s why you weren’t using your car. They may wonder if the car incurred some damage and that is why you are now seeking insurance. If this happens, your former insurer may not be willing to extend another policy to you, and you may end up needing a high-risk policy for a period of six months or more.
In addition, your state may have penalties for owning a registered vehicle that is not insured. On top of higher insurance premiums you could also end up with fines and even suspension of your driver’s license.
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In order to stay out of trouble and avoid the cost of penalties, fines, and reinstating your driver’s license, the safest thing to do is to keep your insurance in place. However, if saving money is a priority, your insurance provider may have other options for you.
Some companies allow you to remove all coverage other than liability for the months your vehicle isn’t in use. This can reduce your monthly premium as well as keep you in compliance with your state’s laws and the requirements of your insurer. When you’re ready to hit the road again, all you’ll need to do is contact your insurance company and add the other coverage you need back to your policy.
You may also be able to surrender your car’s license plates and registration to the state. If you don’t have a registered vehicle to insure, then your months without coverage will be less likely to be viewed as a lapse. However, there is no guarantee you will have the same insurance rate you had before when you reinstate registration and coverage.
Overall, your best bet is to maintain insurance, but you may still be able to save some money. If you want to make sure you have the car insurance coverage you need, give an agent a call. They can help you find the right insurance policy for you with a price that fits your budget.