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Car Insurance When You Hardly Drive

Car Insurance for Infrequent Drivers

Sometimes changes in life will cause you to drive less. You may have just switched jobs and no longer have to go into the office five days a week. Or maybe you’ve just retired. Such a change leads many people to a question: Can I change my car insurance coverage to save money? Is there such a thing as car insurance when you hardly drive? The answer is “yes,” but it’s complicated. Here’s why.

Driving less?

If driving less has you considering any kind of change to your auto insurance, the first step is to talk to your agent. Using the knowledge of an agent is always smart. Your agent can review and tweak your coverage based on your driving habits, the latest announcements from the state insurance commissioner and the updated policies of various insurance companies.

Usage Apps

Driving infrequently and on less-crowded roads might make this an ideal time to try usage-based insurance, or UBI. It’s as simple as downloading a smartphone app that tracks driving behaviors and sends the data to your insurance company. If you exhibit “good” driving behaviors — obeying speed limits, gradual starts/stops, low mileage — you get a discount. An immediate 5% signup discount is typical, followed by a more significant behavior-based discount that can reach as much as 20%. Learn more about how these drive apps work.

Cancellation Isn’t Optimal

If you’re still looking to cut costs further, you may be tempted to cancel coverage on an unused vehicle, but there are a number of reasons why this isn’t a good idea.

First, certain types of coverage are essential even when your car is parked in the garage. Comprehensive coverage is an example: it protects against theft, vandalism, fire, severe weather, branches falling from above and most other perils that aren’t related to a collision.

Second, having a total lapse in your auto insurance coverage — even for just a few months — can have a significantly increase the cost of reinsuring your car once you need to drive it again. Expect to pay as much as 20% more in premiums when you begin to shop for new coverage.

Another reason not to cancel your car insurance is that your various insurance policies should all work together as an interconnected layer of protection. Canceling car insurance altogether may have ripple effects on other types of coverage. For example, if you have an umbrella policy, you typically are required to carry an auto policy as well.

Finally, keep in mind that if you need to drive the uninsured vehicle at any time, you’ll be breaking the law. You always must have state-minimum levels of coverage when you’re on the road, even if you’re just taking a quick trip to the grocery store. Not to mention the incredible level of financial risk you expose yourself to by driving an uninsured car.

Pausing Coverage

One option is to pause your insurance instead of canceling it outright. This is also known as suspending coverage. While this is a good alternative to canceling coverage, most insurance companies restrict how often you can do suspend the policy, and for how long. For example, the insurance company may require that you suspend your coverage for at least 60 days or more, and they may not allow you to do this more than once per year. If you attempt to suspend your coverage too often or for too-brief periods of time, your insurance company may drop you.

Once again, the best first step is to call your insurance agent, and discuss options prior to making any moves to change the coverage.

– Written by Matt Forrest, last updated in December 2022.

–Top photo is by Sasiistock/iStock.

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