Operating a vehicle on Canadian roadways requires that it be insured. But what happens when you don’t use your vehicle for months out of the year? Is it necessary to continue paying insurance premiums even when your vehicle is not in use for extended periods of time?
More specifically, is it possible to take out a seasonal vehicle insurance policy instead of a traditional insurance plan to help you save money on premiums?
Key Points
- Seasonal car insurance is designed for vehicles that are only used during certain times of the year, like RVs, motorcycles, or convertibles.
- Even when your vehicle is not in use, you should still maintain some level of coverage to protect the vehicle from things like theft, vandalism, or damage from the elements.
- Before opting for seasonal car insurance, consider the legal requirements in your province, storage conditions, and the potential savings versus fees for modifying your policy.
What Is Seasonal Car Insurance?
“Seasonal car insurance” is actually short-term auto insurance. Standard vehicle insurance policies have at least a one-year term, though some insurers may provide 6-month policies. However, not many insurance providers offer such short-term policies.
Even if you only use a certain vehicle for a few months a year, you should still insure it for the full year, even if it’s just sitting in storage. When not in use, your vehicle may still be vulnerable to theft, damage, vandalism, and other issues. As such, it’s always important to ensure that it’s adequately covered with some form of insurance to protect you in these unexpected situations.
Depending on your insurance provider, it may be possible for you to take off the required liability portion of your policy, as well as the optional collision coverage while storing your vehicle. Be sure to speak with your particular insurance company, as different firms provide different options, as do different provinces.
Seasonal Car Insurance Coverage Types
Seasonal car insurance typically covers vehicles that are not used year-round, such as ATVs, RVs, and snowmobiles. Here are some common types of coverage:
- Comprehensive Coverage. This type of coverage protects your vehicle from risks not related to collisions, such as theft, vandalism, or fire. It’s usually meant to protect the vehicle while it’s stored during the off-season.
- Liability Coverage. Liability coverage covers damages to others if you’re at fault in an accident.
- Collision Coverage. Collision coverage covers repairs to your vehicle after an accident.
Can I Suspend My Car Insurance?
You may be able to free your car insurance policy depending on where you live. For example, in Ontario, you may be able to suspend your insurance through Form OPCF 16. Then, when you want to reinstate your policy, you would need to complete Form OPCF17.
Learn more: Can You Put Your Car Insurance On Hold?
Can I Get Pay-As-You-Go Car Insurance In Canada?
If you take your seasonal vehicle sporadically and not necessarily during specific seasons of the year, then you may consider a pay-as-you-go policy. This type of insurance bases your insurance premiums on how much you drive. Rather than paying a fixed rate every month or year, you pay for the actual distance you drive.
More specifically, you’ll be charged a base rate for your policy and then you’ll be charged additional premiums based on the number of kilometres you drive. Typically, a device is placed in your vehicle to track your mileage.
CAA offers a pay-as-you-go type of policy, though it’s only available to drivers in Ontario, New Brunswick, Nova Scotia, and PEI.
Should You Cancel Your Car Insurance Early?
You might be tempted to cancel your insurance policy when you’re not using your vehicles for a few months, but it may not be a good idea. Here are just a few reasons why you may want to consider keeping your car isurance policy as is:
- Early Cancellation Fee. If you cancel your vehicle insurance policy before the end of its term, you could be charged a fee to have the policy cancelled early.
- Driving Without Insurance Is Illegal. While you may not have to operate your vehicle for a certain period of time, there is a chance that you may want or need to take it out of storage to use for whatever reason. If you are caught driving your vehicle without insurance, you could face serious repercussions, including losing your license.
- No Protection If Your Vehicle Is Stolen Or Damaged. As mentioned, there’s always a chance that your vehicle could be subject to theft or damage while it’s in storage not being used. If that happens and your vehicle is not insured, you’ll be stuck paying for the damages or replacement costs in full yourself.
- Higher Premiums With Gaps In Coverage. A lapse in insurance coverage could increase your premiums the next time you call your insurer to put your policy back in place. Depending on how long you go without coverage, your insurance company might consider you to be high-risk, which can further drive premium prices up. And in some cases, your insurance provider may completely erase your insurance history if you go too long without insurance.
Tips On Insuring Your Seasonal Vehicle
To make sure your vehicle is adequately covered at all times, consider the following tips:
Remember To Reactivate Your Policy
After months of your vehicle being in storage and paying for minimal insurance coverage, you’ll want to make sure that it’s fully covered once it’s time to take it out of hibernation. Before you operate your vehicle on the roadways, remember to reinstate your insurance policy first so that you’re adequately covered and adhering to legal requirements.
Inquire About Discounts
If you’re looking to keep your insurance costs low, ask your insurance provider if you qualify for any discounts. For instance, insurance providers tend to offer discounts to seniors, students, or recent driving course grads. There may also be discounts for good driving records, security systems installed in your vehicle, having multiple policies with one insurer, or choosing a higher deductible.
Have Your Vehicle’s Value Appraised
If your seasonal vehicle is high in value, you might want to have it appraised every time you take it out of storage to make sure that its full value is covered under the policy.
Find Out The Licensing Requirements In Your Province
Every province in Canada might have different regulations when it comes to vehicle insurance and licensing requirements. So be sure to find out exactly what these are where you live, and if the license plate sticker is valid and up-to-date.
Inspect Your Vehicle Before Taking It Out On The Road
Vehicles that have been in storage for an extended period of time may need to be thoroughly inspected before driven to make sure they’re in good condition. This includes checking the fluid levels and inflating the tires, among other things.
Alternatives To Seasonal Car Insurance
If your insurance provider doesn’t offer seasonal car insurance or this type of arrangement isn’t suitable for you, consider these alternatives:
Usage-Based Insurance
Usage-based car insurance bases premiums on how much you drive. If your vehicle usage fluctuates throughout the year, you may find yourself saving a great deal of money without having to make seasonal changes to your existing policy.
Temporary Policy Adjustments
Some insurance providers allow drivers to make temporary changes to their policies without the need to switch to a seasonal car insurance policy. For example, you may be able to reduce your coverage for a few months during the off-season without the need to sign on to a seasonal policy.
Factors To Consider Before Opting For Seasonal Car Insurance
Before choosing seasonal vehicle insurance, make sure to consider the following:
Legal Requirements
Each province has its own minimum liability coverage requirements for registered vehicles. Make sure you follow the laws in your province before putting a hold on coverage.
Insurer Requirements
Different insurance providers may have their own levels of restrictions when it comes to adjusting coverage on registered vehicles. Make sure you fully understand all terms and conditions associated with your policy and what your insurer requires before making changes.
Storage Conditions
It’s always recommended to store your seasonal vehicle safely. The type of storage you choose plays a direct role in the likelihood that your vehicle will either be kept secure or will be vulnerable to the elements or thieves. If your storage space is not secure, consider maintaining comprehensive coverage.
Frequency Of Use
If you use your vehicle sporadically instead of on a seasonal basis, repeatedly modifying your policy may be impractical. In this case, you may want to consider keeping a standard policy.
Potential Savings Vs. Fees
The idea behind pausing your policy is typically to save money on premiums. But putting a hold on your policy may come with fees, depending on your situation and your insurance provider. Be sure to weigh the costs versus savings to see if the hassle is worth it.
Final Thoughts
Considering the cost of vehicle insurance, it might make sense to consider opting out of a comprehensive policy during the months of the year when you’re not using your vehicle. But while this may be possible, you’d probably be better off keeping your policy active on your vehicle. In this case, simply keep your policy to a minimum to reduce costs while ensuring that your vehicle is still adequately covered.
