Canceling your car insurance isn’t something most people think about. After all, you have to have insurance on your vehicle, don’t you?
For most people, car insurance is a good thing. It ensures you’re legally able to drive your car, and it can protect you and your bank account in the event of an accident. However, car insurance can be expensive, so it’s worth your time to consider whether or not you need it. If you don’t, it’s also well worth your time to know the right way to get rid of it.
Vehicles Kept on Your Property Do Not Need to Be Insured
Almost every state requires you to have insurance on your vehicle. That includes having insurance on a vehicle that is parked on a public road, as well as public parking lots. That also includes a spot on the street in front of your home.
However, the same rule does not apply if your vehicle is kept on your property. Cars parked in your garage or in your yard do not need to be insured. Cars being kept in storage facilities or private yards are also unlikely to need insurance.
If you have a large plot of land and drive your own vehicle on your private property, you likely won’t need to have it insured either. Just keep in mind that if there’s a chance for your vehicle to interact with vehicles owned by others, you could be liable for any damages in an accident.
Be Prepared to Purchase a Self-Insurance Certificate
Insurance isn’t cheap. You could end up paying hundreds, or even thousands, of dollars a year on insurance. That money could be better spent elsewhere, especially if you go year after year without making an insurance claim.
If you don’t want to pay for insurance, you have the option of being self-insured. This is an option for things like life insurance and health insurance, as well as car insurance.
However, since nearly every state requires you to have insurance on your vehicle, it is extremely important that you have proof that you are self-insured. With proof of a deposit into a special account of at least $30,000 or a bond, you can ensure you won’t be in trouble for not having insurance when you’re pulled over. It is important to note that if you’re in an accident, you will be completely responsible for paying for the damages.
You Can Save Money by Suspending Your Insurance
Do you drive your vehicle every day? If you do, having insurance is essential. If you don’t drive your vehicle every day, you could be spending more than you should. That’s especially the case if you don’t drive your vehicle for long periods of time.
There are situations when you can suspend your car insurance and save. A few examples when you might want to consider suspending your insurance include:
- Vehicles that aren’t driven during the winter
- Cars that won’t be driven while you’re on a business trip or vacation
- Vehicles that won’t be used during military service
- When you are relying on public transportation
In most cases, if you’re upfront with your insurance company, they will suspend your insurance without any penalties.
Make Sure You Cancel Your Insurance the Right Way
No matter what your reasons for canceling or suspending your car insurance, it is important to do it the right way.
Never stop paying your car insurance as a way to cancel your policy. Although it will have the desired effect, it can have disastrous consequences if you decide to pursue car insurance again in the future. Your rates will likely be higher because you have a history of not paying your premium.
It is important to notify your car insurer of your intentions. Give them a timeline and ask if they can assist with a policy transfer, if you’re canceling your policy to move to a new insurer.
If you pay annually or biannually, you have to think carefully about when you cancel your policy. If you’ve already paid a portion of your premium, you may receive a refund for the portion you don’t use. However, that isn’t a given, so make sure you talk to your insurer before you make the choice to cancel your policy.
Consider Canceling Only a Portion of Your Insurance
If canceling your policy altogether isn’t a possibility, you can still save on your insurance costs. One of the best ways to do that is to cancel certain portions of your insurance while keeping essential features intact.
For example, you can drop comprehensive coverage, and instead, only pay for liability coverage. It’s true that your vehicle won’t be covered in the event of an accident, but it will cover the cost of the other driver’s vehicle if the accident was your fault. It also shows the authorities that you’re insured, enabling you to avoid costly tickets and the possible removal of your license.
Always Have the Right Documentation in Your Car
Whether you have insurance or not, it is extremely important to have the proper documentation in your glove compartment. That means keeping your current insurance card in your car, as well as proof that you’re self-insured, should you decide to go that route.
If your vehicle has suspended coverage, make sure you include that in your compartment too. That way, you know exactly where to find information regarding when your coverage ends, as well as when it will be reinstated. And of course, don’t forget to include your registration in your car!
One thing you shouldn’t keep in your glove compartment is the title to your vehicle if you own your car outright. Not only can it be lost, but a thief could use it to sell your car more easily.
Although you may feel like you’re doomed to sink money into a frustrating auto policy, the truth is, you may not have to pay for that auto policy at all. With the tips on this list, you can cancel or suspend your coverage with confidence.