No, you cannot simply turn your car insurance on and off like a switch. However, you can cancel your policy at any time or, in some cases, request a suspension of coverage. Doing so is a significant financial and legal decision that requires careful consideration, as driving without insurance is illegal in most states and can lead to severe penalties and long-term cost increases.
The most common action is to cancel your policy outright. You can do this by contacting your insurance agent or company. Be aware that you might face a cancellation fee, and you will receive a refund for any prepaid premium for the unused period. The major risk here is creating a coverage gap. Insurance companies view a lapse in coverage as a sign of higher risk, which will likely lead to higher premiums when you seek a new policy later.
A better alternative for vehicles that will be parked and not driven for an extended period (e.g., during a long overseas deployment or seasonal storage) is to explore a suspended coverage or storage policy. This often involves removing liability, collision, and comprehensive coverage—the coverages required for driving—while keeping only comprehensive coverage to protect the vehicle from theft, fire, or vandalism while in storage. This maintains continuous insurance history, which helps avoid premium hikes later.
Before making any decision, it's critical to understand your state's specific laws and the requirements of your auto loan or lease lender, who will mandate that you maintain certain coverage levels. The following table outlines the core differences between these options:
| Action | Best For | Key Benefit | Major Risk | Impact on Future Premiums |
|---|
| Policy Cancellation | Selling a car, switching insurers permanently. | Stops payments immediately. | Creates a coverage gap; illegal to drive. | Significant increase due to lapse in coverage. |
| Suspension (Storage Policy) | Long-term storage (e.g., classic car, overseas travel). | Maintains insurance history; protects car from physical damage. | No driving coverage; car cannot be driven legally. | Minimal to no increase if done correctly. |
| Reducing Coverage | Temporarily cutting costs on a paid-off car. | Lowers monthly premium. | Increased personal financial risk if in an accident. | Moderate impact based on new risk level. |
The safest approach is to always discuss your specific situation with your insurance agent before stopping payments. They can guide you through the legal process and help you avoid costly mistakes.
