Since I'm not going to use my car for two months, can I stop paying car insurance?
November 28, 2006 7:13 AM   Subscribe

My car is in Connecticut and I'm going home with my girlfriend to Hawaii for two months. Therefore, the car won't be used or touched. To save money, should I cancel my car insurance?

My girlfriend is from Hawaii and my car is in Connecticut. I plan on going home with her for two months. As a result, my car will remain parked, unused, and untouched for two months at my house in a covered secured garage. No one else can nor will use the car.

It just so happens that my car insurance policy expires a few days after I leave. I called my car insurance company to ask them if I could just not pay for two months, and when I get back to CT to resume my car insurance again. The lady on the phone told me "Insurance companies don't like gaps in coverage", but was unable to elaborate further.

Can anyone explain what this means? Will my insurance rate go up as a result of selectively deciding to not pay for 2 months? Or if there's any way to get aroud this?

Basically, not paying for 2 months would save me in about $275. I'm a college student so that's a whole lotta money.
posted by Jimmie to Travel & Transportation around Connecticut (13 answers total)
Generally, that's a bad idea. Most insurance companies will refuse to insure you if you have a gap in your coverage. They assume that you must be trying to get insurance to fix up damage that happened when the car wasn't insured.

You'll be forced, for at least six months, to insure with a high-risk company, and it will usually cost a lot more than your old rate. As a college student, you're already paying high rates, so the 'punitive' rate may not be quite as bad, but it's almost certain that you'll take a bath on the deal.

You MIGHT be able to work something out with a first-party agent, that is, someone who works directly for the company, rather than brokering many different kinds of insurance. But I don't think it's very likely.
posted by Malor at 7:21 AM on November 28, 2006

what happens if it does get stolen? that'll cost a lot more than $275 or if something else "worst case senario" happens . . ..
posted by uncballzer at 7:23 AM on November 28, 2006

Some companies let you put your coverage (and payments) on "hold" for periods when you aren't using the vehicle. You could keep paying for comprehensive (in case of theft), but stop paying for collision, liability, etc. I think Progressive lets you do this, for example.

Even if your insurer can't do that, you can at least decrease your coverage to the minimum and increase your deductibles to the maximum while you're away.
posted by mbrubeck at 7:33 AM on November 28, 2006

My car was stolen a couple of weeks ago. It's unlikely that my insurance company would pick me up again if I cancelled. Erie Insurance is notoriously low-risk, but also very cheap. I reduced my coverage to the state minimum 20/40/15 and that cut the premium pretty significantly. Is it stupid to pay for the insurance on a car that I don't have anymore? Yes, but it's worth it because I plan on buying another in the near future.

I'd reduce coverage to the minimum if you're pretty confident that the car won't be stolen. Wouldn't be a bad idea to remove the battery or otherwise temporarily disable it to be sure.

How much is the car worth?
posted by electroboy at 7:34 AM on November 28, 2006

Similar situation a while back and our insurance people advised against having no insurance. Like uncballzer states, "what happens if it does get stolen?" or if there is a fire and it burns up or someother weird occurance.

Perhaps you could change your policy around a bit though. Take out absolute minimum coverage. Call your insurance people up again and explain what's going on and ask them what they'd recommend.
posted by Sassyfras at 7:37 AM on November 28, 2006

Check with your agent; I know some friends who have been in similar situations and have been been able to insure their cars, which were in storage for a few months, to the tune of $10/mo. or something of the sort since they wouldn't be driving them.
posted by craven_morhead at 8:08 AM on November 28, 2006

Usually companies call it a "storage plan" or something similar. It effectively strips your insurance of everything except comprehensive coverage (to cover fires, theft, vandalism, etc). The big drawback to this is it has to be garaged - no one can drive it, and leaving it in a parking lot is usually not acceptable. Some companies insist that it remain garaged at your residence or in a storage facility. All the large companies have it in some form, although there may be a few that do this only for military. Your agent should be able to tell you if that's possible with them, and give you a quote for it before you make the decision.

If you can't do that, then I second the idea to lower it to the minimums. If you're sure nothing will happen and you can leave it in a safe place, or it's not worth much, you may just want to go with liability only. However, when you come back and want to raise the limits again, expect the company to want to do a visual inspection as lowering and then raising your limits is a fraud indicator and may raise a few red flags.

Never ever ever - and I can't stress this enough - go without insurance for any length of time. Companies hate that and will take it out on your premiums. The difference you'll pay after not having insurance will make whatever money you save without it for two months completely moot.
posted by sephira at 8:10 AM on November 28, 2006

In Maryland, for an registered vehicle (i.e. one with plates and registration, as opposed to merely titled in your name) an uninsured violation is an immediate $150 fine plus an additional $7/day for every day the car is uninsured, with no cap (!!) Multi-thousand-dollar fines are not unknown.

So if my insurer didn't offer a storage plan, I'd turn in my plates to the DMV, *and then* - and only then - notify my insurance company that the car was no longer on the road and and I was dropping coverage. Your insurer won't mind that; it's just the same as if you'd sold the car.
posted by mojohand at 8:36 AM on November 28, 2006

Im an agent in Florida and Georgia, so I am not totally sure on the rules where you are, however...if you have a car that is registered and with a tag, you must carry at least the state minimums on your insurance. I do not kno how they do it, but they will find out about the lapse in coverage and totally fine you.

Also, you can definitely get insurance when you come back, but you will get penalized big time in your premium for the lapse in makes you look like a high risk driver when probably you are not.

I am not positive, but I do not know of any "holding" plans that actually suggestion, drop everything to the state minimum coverage, and keep it insured, it will pay off in the long run.
posted by meeshelle39 at 8:46 AM on November 28, 2006

our insurance people advised against having no insurance

Similarly, my barber always advises me that my hair needs cutting.

meeshelle39 has the best advice, though there is one caveat- I have no idea if CT is a state like FL where case law exists supporting vicarious liability. In a nutshell, the uses and misuses of your car are attributable to you for purposes of legal liability. In FL, if someone steals your car and crashes it into a bus full of nuns you can expect to be named in a suit. Not likely to stick in a court of law in that case, but what if your 2nd cousin who has access to your home and knows where your keys are borrows it and hits that bus?

If the law in CT is similar then you should keep your insurance coverage the same whether it's within your ability to drive it during that time or not. Otherwise just drop your collision coverage entirely and your liability (the big one) to the legal minimum.
posted by phearlez at 9:03 AM on November 28, 2006

don't drop coverage. where i am (oklahoma) the insurer is required to notify the state of lapsed coverage. if you still own a car, this can lead to suspension of your drivers license. could be rectified, but would be a mess. also, as someone stated above most reputable insurers punish you if you have not been insured for 6 months prior to purchasing insurance. you may save $275.oo now, but pay that much or more extra for a year after you reinsure.

however, you are only required to keep minimum liablity coverage to satisfy these requirements. i have no idea what your options are as far as the storage thing, but it would be worth looking into.
posted by domino at 9:34 AM on November 28, 2006

Here is the CT DMV's page on insurance requirements.
"Whenever insurance coverage is cancelled, the DMV is notified by the insurance company and the registrant is mailed a Warning Notice offering the opportunity to enter into a consent agreement, obtain insurance, and pay a fine of $200. ... Failure to comply with the warning notice will result in the mailing of a Suspension Notice. At that time, a hearing may be requested. An adverse decision following an administrative hearing will result in Suspension of registration [and] Loss of all privileges to renew or register ANY motor vehicle."
So just canceling your policy is a bad, bad idea. There are two legitimate ways to go about reducing your premiums:
What if I am not using my seasonal vehicle and wish to retain my marker plates?

Request in writing through your insurance carrier "suspension of liability." Be sure to keep comprehensive coverage during that time which reduces your insurance rate and keeps your vehicle from being reported. While doing this, you must NOT operate your vehicle.

What if I don't want to pay insurance while my car is inoperable or being stored?

You may turn your marker plates into any DMV and request that they be placed on "hold." At that time, you may then drop all insurance coverage on the vehicle. You may also cancel your plates and request a refund if a year or more remains unused.
So if you really want to drop coverage, you have to turn the plates in and put them on hold, then cancel your insurance. But as other people have pointed out, this will result in you being punished mightily when you want to pick it back up again. If you were leaving for a few years it might be worth it, but $275 isn't worth it.

If I were you, I'd call and ask for a Suspension of Liability from your insurance company, and keep comprehensive coverage on the car (unless it's such a pile that it's not worth it, and you have the cash ready to replace it if it gets stolen/burned/whatever).
posted by Kadin2048 at 9:42 AM on November 28, 2006

Most insurance companies let you switch to a "storage" plan where you dont drive it. Ive done this in NY and VA, and it let me reduce my rate to 30% without having to drop my insurance (no insurance in VA means you're legally obligated to turn in plates)
posted by jare2003 at 4:24 PM on November 28, 2006

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