I have a question about automobile insurance. My car has expired, and I have decided to save up and buy another one, rather than attempt to repair it. (It may take about a year, I don’t have a lot of spare money.) I have been taking the bus for awhile, and that should suffice for me, along with an occasional ride with relatives to the store.
I called my insurance to cancel the policy, since I won’t be driving the car. They said that probably would not be a good idea. Even if / when I sell my vehicle, it would be a good idea to get a “non-owner’s policy”. While I still have it but am not using it, a “storage policy” would be best for me.
The person I talked to (I have known her since high school, by the way) said that a cessation of a policy would be a very bad thing – it would make my insurance premiums higher once I bought a new car (after waiting a year, as I said before).
I am well aware that she may just be looking out for
Is that true? Or was she just using “scare tactics” on me?
The “storage policy” is only $14 per month, which is easily doable. Is it a good idea?
It’s true. A lapse in coverage will make your premiums much higher when you need insurance again.
I knew a guy who leased a car. The lease came with insurance, so he dropped his own policy. When the lease ended he decided to go back to owning his own car, and discovered his old company didn’t want him back.
The policy may have changed since then, but at one time it was a real thing.
Yes, lapses in coverage aren’t a good thing.
Thank you all very much for the replies! Much appreciated.
I would double and triple check that this “storage policy” won’t result in you getting dinged for a lapse. Most “storage policies” I’m aware of are comprehensive coverage only, whereas it’s your liability coverage that you get penalized for if it lapses. I’d at the very least check with this person’s supervisor and maybe even ask another insurance company if they’d consider that policy not being a lapse.
In general, unless you’ve got some other issues that make you hard to insure, if you’re going car-less for a long period it makes more sense just to cancel your insurance and eat the rate hike when you get back. The hike won’t cost more than insuring a car you’re not driving for months and months.
IME, Greasy is on the right track. Most folks who do a “Comprehensive only” policy on one car will have another that they drive regularly and have a liability policy on. So they never actually go without liability coverage.
This matters to the underwriter for a couple reasons. You owned a car and did not carry liability coverage. Looks like you’ve been driving without liability coverage. Underwriters are used to getting lied to, so they tend to be a skeptical lot–can you prove your car has truly been undrivable? Oh, fantastic! You kept your receipts and a log book, maybe a blog with dated metadata, documenting your rehabilitation of the vehicle and fully proving you were not driving it without liability coverage. Guess what. If you’re not driving regularly, you’re falling out of practice and BAM, into the “new driver” category with you!
And you can get all the assurances you want from your underwriter & agent, but companies change their underwriting guidelines all the time and what is true today might not be true by the time you’re ready to put your buggy back on the road. Today’s truth won’t be binding tomorrow. In the end, you gotta do what you gotta do. Insurance premiums are just one hair in your life’s dust bunny.