Differences Between Pausing, Canceling and Reducing Auto Insurance

​Amidst the pandemic, you might be thinking about ditching your auto insurance due to your idled vehicle. Although putting your car insurance on hold is an excellent way to save money, it can be confusing as your options depend on your driving hiatus. Here are the differences between pausing, canceling, and reducing your auto policy to avoid unexpected fees and policy errors.

Pausing Auto Insurance Policy
Pausing your auto insurance can prevent “insurance lapse” during your driving hiatus, as your rates might spike if you left your policy unattended. Insurers offer this option if its grace period exceeds the time you can’t work due to pandemic or insurable incidents. However, pausing coverage will leave you uninsured, even with non-driving accidents like fire, vandalism, theft, or animal damage.

Canceling Auto Insurance Policy
Auto insurance cancellation halts your current coverage to get a new one when you are ready to drive again, but this is inapplicable to car loans. Your state may ask you to submit a non-use affidavit to drop state-required insurance officially. However, canceling creates an insurance lapse that can make you labeled a “high-risk driver” that makes your insurance rates higher.

Reducing Auto Insurance Policy
If you don’t want to cancel your policy or are ineligible for pausing it, reducing your auto insurance is a better alternative to decrease your costs while on a driving hiatus. One recommendable coverage that you should keep is the comprehensive insurance that pays your fees for replacement, thief, and other non-driving problems. Meanwhile, your insurer might require some specific insurance coverage if you have a car loan.

If you are experiencing financial conflicts due to unemployment, insurers also give these options that you can explore:

• You can try to request a coronavirus-related payment delay or plan.
• You can also remove yourself from your family car insurance policy temporarily.

Halting your auto insurance policy is not as easy as suspending your Netflix subscription, as you have varied, yet, limited options depending on your driving record condition. It is better to keep your car insured to be legally and financially protected.

At Oncken Insurance Agency, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (281) 256-8310. Get your free quote today by CLICKING HERE.