Car Insurance When You Hardly Drive

Published: April 28, 2020

Car Insurance During COVID-19

Many of us have been driving substantially less than we used to. This change in car use brings up a common question: Can I change my car insurance coverage to save money? The answer is “yes,” but it’s complicated. Here’s why. 

Changing Circumstances

If driving less has you considering any kind of change to your auto insurance, the first step is to talk to your agent. Utilizing the knowledge of an agent is always smart, but it’s absolutely critical right now with the pandemic changing so many aspects of our lives. Your agent can review and tweak your coverage while taking into consideration your new driving habits, the latest announcements from the state insurance commissioner and the updated policies of various insurance companies.

UBI Is an Option

Driving infrequently and on less-crowded roads might make this an ideal time for you to save on insurance by trying usage-based insurance, or UBI. It’s as simple as downloading a smartphone app that tracks your 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 percent signup discount is typical, followed by a more significant behavior-based discount that can reach as much as 20 percent. Learn more about how these drive apps work.

Cancellation Isn’t Optimal

If you’re still looking to cut costs further, canceling the coverage on an unused vehicle may seem like the most impactful option. There are a number of reasons you should avoid canceling your car insurance, if possible, however.

First, certain types of coverage are essential even when your car is parked firmly 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 significant impact on the cost of reinsuring your car once you need to drive it again. Expect to pay as much as 20 percent 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 open yourself up to by driving an uninsured car.

Pausing Coverage Has Restrictions

Another option is to pause your insurance instead of canceling outright, which is also known as suspending coverage. The only issues with suspending coverage are that most insurance companies restrict how often you can do this, and for how long. For example, they may require that you suspend your coverage for at least 60 days or more, and they may not allow you to suspend it 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.

–Written by Matt Forrest

AAA Washington Insurance Agency is here to help. If you are looking to review your car insurance or simply have questions, call (877) 222-4678 for a free, no-obligation consultation. You also can find an agent near you, or request a quote online.

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