Many of us are driving less these days. Nearly all of the major auto insurers are providing some sort of refund – this suggests an overall average of 15% to 25% back on two months of premiums. But what if you don’t need to use your vehicle for an extended period of time? You might:
- Reduce your coverage levels to the minimum liability coverage levels required by your state for driving, saving money on premiums but assuming some risk yourself (depending on how much you actually drive).
- Suspend your coverage as if your car was in storage. This would include liability and collision insurance. You may consider keeping comprehensive insurance to protect against theft, fire, or other damage.
- Something in between. If you feel like you are driving a lot less, you could do some combination of raising your collision/comprehensive deductibles, dropping only collision coverage, or changing up any of the various options to lower your overall premium.
A common situation might be that a couple owns two cars but only really needs one for a while. Reader Beth shared that she chose to drop the (more expensive) coverage on her newer car while keeping the existing coverage on the older car, thus saving more than 50% on her total bill:
Our family lives in Texas, and we own two cars. Right now because of COVID-19, my husband and I are both working from home and hardly leaving our house, so we do not need both cars. I called our insurance company and temporarily dropped coverage on our newer, more expensive car, which is saving us more than half our 6-month premium. Once the COVID-19 restrictions ease up, we’ll add the second car back on.
[…] We took our newer car off completely and left our older car with the same level of coverage it had beforehand. Allstate said they would happily add the newer car back on whenever we’re ready, and they will simply prorate the amount for however much is left of our 6-month policy.
We are only driving the older car (we drive a couple of times a week right now), and the newer car stays in the garage. Allstate even emailed us a little sign to print off to tape on the steering wheel to remind us to call and reinstate coverage.
I agree with her other advice that the best thing to do is to call your insurance company and explore your options. Mine has always been happy to help me compare a variety of options along with the resulting price changes. If asking about pausing or suspending coverage, you want to make sure it is treated differently than “canceling” coverage, as gaps in coverage can make you look riskier and hike up your future premiums.
As an aside, if you are not going to move your car for a long time, you should looks up tips to prep it for long-term storage. Otherwise, I’d worry that the damage might exceed the insurance savings. Ideally, you would start it up every couple of weeks and drive it for a while on a private driveway.
Note that if your car is under a loan or lease agreement, you may have agreed to maintain a minimum level of coverage that includes both collision and comprehensive coverage. Has anyone else had success in doing this? Or tried and run into problems?
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