Can You “Pause” a Policy?

An extended leave of absence might occur under many different circumstances, ranging from active military duty to a religious mission. While you are away, you will of course not be driving your vehicle, which means you need to make modifications to your coverage prior to your departure. Read on to learn what to do when you need to suspend or pause your auto insurance policy and why you might need to do so.

Reasons for Coverage Suspensions

You may need to adjust your car insurance policy for any of the following reasons:

• Military deployment. You are called to active duty in the armed forces. In certain states, insurers are prohibited from charging returning soldiers higher rates due to gaps in coverage, so policy cancellation is the best option for members of the military.
• Traveling abroad. You plan on traveling for an extended period of time and will not be using your vehicle while away.
• Prison sentence. A jail or prison sentence will require you to adjust your policy until you do your time.
• Hospital stays. An extended hospitalization requires changes to your car insurance coverage.
• Extended maintenance. You can alter your coverage if your car requires significant work and will be in a body shop for an extended period of time.
• Selling the vehicle. You no longer drive the vehicle and are trying to sell it, and you want to modify your policy accordingly.

Car Insurance Hiatus?

Technically, it is not possible to pause or suspend a car insurance policy. You cannot maintain coverage without making regular payments, which means you have two choices in lieu of trying to pause your auto insurance coverage. First, you can cancel your coverage entirely before you leave. Alternatively, you can place your vehicle in storage and adjust your policy to include minimal coverage, thereby lowering your premiums substantially.

Cancellation vs. Modification

If you truly have no need for car insurance coverage during your absence, you may want to cancel your policy, although cancellation will have financial repercussions. When you cancel your policy, you will have a coverage gap in your insurance history, which means you will pay higher auto insurance premiums in the future. In certain states, these penalties do not apply to members of the armed forces returning from active duty, as explained earlier.

To avoid the consequences of policy cancellation, you might try modifying your policy instead. Your best bet is to put your vehicle in storage and to drop all coverages except for comprehensive coverage to protect the vehicle from incidental damages. Without liability coverage and other costly features on your policy, your premiums will be significantly lower during your leave of absence. In this way, you maintain your consistent coverage record without incurring unnecessary expenses while you are away.