If you already have a policy currently, you may be wondering if you can cancel your auto insurance and save some money. While you technically can cancel your auto insurance at any time, you may run into some cancellation fees, and you may or may not get a refund on the premium you’ve paid for in advance.
Another outcome is that your auto insurance provider cancels your policy mid-term, which it’s legally allowed to do due to the suspension. If that’s the case, you won’t have a choice, and your policy will end before its expiration date. But if your insurance provider doesn’t cancel your insurance, there are some good reasons to keep it active.
Why You Should Keep Your Car Insurance
Although not suspending your car insurance temporarily while your license is suspended may seem silly, it makes sense for a few reasons:
- Avoid lapses in coverage: Gaps in coverage could make your insurance rates higher, as they’re associated with high-risk drivers.
- Drive on a restricted basis: If you have to go to work, school, or medical appointments, you could get a restricted license to drive to these locations. If you’re driving at all, you’ll still need insurance.
- Get your license reinstated: Once you’re eligible for license reinstatement, you will most likely need proof of insurance to get it reinstated.
- Protect your car from damages: Even if you’re not driving your car, it could still be damaged, and without insurance, you’d be responsible for the costs of repairing or replacing it out of pocket. Insurance can reimburse you for events like hit-and-runs under underinsured motorist coverage; vandalism, theft, and fires under comprehensive coverage; and other events that don’t require driving on your part.
To save money, consider dropping collision coverage if you’re allowed. If no one else is driving your car and it’s parked in a private spot, it’s unlikely it’ll be involved in a collision. Read more about the difference between collision and comprehensive coverage.