We’re like shut-ins. Only vital driving for prescriptions, food or medical help is necessary so our cars and trucks sit in the garage going nowhere. Ahh, but that means fewer miles driven means there is less likelihood of an accident. And that’s a reason your insurance company should be able to help you reduce your monthly payments during the coronavirus shutdown. Let’s take a look at ways you can do this.
You could reduce your insurance by putting a hold on it
First, if you’re not using your car at all and instead of getting food and prescriptions through delivery services, you can put a hold on car insurance. You’ll need to check with your insurer to see how this affects a possible car loan. Most loans require insurance to protect what is essentially the bank’s property. Also, even using your car for a few miles a week means you better not drop it.
If you choose not to pay insurance while the car is not being used there are downsides. Remember that it won’t be covered for non-driving situations like fire, vandalism, or theft. No one will be allowed to drive it in an emergency since you have no insurance coverage.
But there are other ways to reduce your insurance.
If you’re out of work as a result of business shutdowns from the pandemic here are five avenues to explore to get a reduction:
You can request a payment delay or a reduced plan.
There are ways to look at suspending coverage.
You can cancel your insurance policy.
Reducing your coverage is another option.
You can remove yourself from a policy.
There are many forms of assistance your insurer can explore with you if you are financially affected by the coronavirus. These can include holding off on cancellation from premium nonpayment, getting a special payment plan, delaying payments, or custom payment options. The best thing to do is contact your insurer first before you start making late payments or start skipping them.
Suspending coverage is not always possible
Suspending coverage is not always possible or is allowed in certain situations. You would only look into suspension of insurance if you have an alternative for transportation. Your state may require an “affidavit of non-use” if you want to suspend coverage. This lets the state know your car won’t be used for a specific period.
Canceling insurance is another way to reduce your costs. But all of the factors applying to suspension also applies to cancellation, with one big addition. Canceling insurance causes a lapse in insurance which could place you as a “high-risk driver.” Drivers who carry continuous insurance get better rates than those with gaps.
You can talk to your insurer about cutting back coverage
If you don’t want to or can’t go the suspension or cancelation route you can talk to your insurer about cutting back coverage. There should be a minimum that the state requires for auto coverage. If your policy has more coverage than that minimum then you could reduce coverage to that minimum. Usually, states will require liability insurance while others also want uninsured/underinsured motorist coverage. Personal injury protection, and medical payments coverage.
In cases like cancellation you still might want to keep comprehensive since it covers the vehicle in case of damage or theft. Sometimes this is called “car storage insurance.” Again, you might need an affidavit of non-use if you decide to do this.
Then there is the option of removing yourself from the policy
Especially if you are going away for any length of time removing yourself from the policy would allow other family members to still use the vehicle. However, it will give you a reduction in payments. Especially if you are considered a riskier driver you are adding more to the policy that=n others who are not considered risky. You can still drive the car in situations like this while an excluded driver cannot.
Your best long term solution is to keep your insurance. An uninterrupted payment history gets you better rates now and into the future.