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To lawfully drive a car in Canada, you need auto insurance. If you’re ever caught driving without an active policy in place, the repercussions can be hefty.
But what if you don’t need your car for a while? What if it will be parked for a few weeks or months — will a car insurance policy still be required? More specifically, can you put your car insurance policy on hold to save some money if you don’t need the car for a temporary amount of time?
Read on to find out if putting car insurance on hold is possible in Canada, and what other alternatives exist to help you save on insurance while your car is temporarily off the road.
When Would You Need To Put Your Car Insurance On Hold?
There may be a myriad of reasons why you may want to put your auto insurance policy on hold, such as the following:
- You want to store your car for the winter
- You’re travelling
- Your driver’s license was suspended
- You’re working from home for a temporary period of time
- You’re working abroad for a few months
- You can’t drive due to illness or injury
- Your car is broken down and in need of repairs
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Can You Put Your Car Insurance On Hold?
You can’t really put your auto insurance policy ‘on hold’ per se, but there are changes you can make to your policy if it will be parked for a while and not driven. Your options will depend on your insurance provider and where you live in Canada.
In Ontario, for instance, there are certain conditions to pausing your policy. You will need to complete two Ontario Policy Change Forms to do so:
OPCF16 – This “Suspension of Coverage” form cancels your auto insurance until you reinstate it.
OPCF17 – This “Reinstatement of Coverage” form must be completed when you are ready to reinstate your policy.
Check out the cost of car insurance for new drivers in Ontario.
By suspending your coverage, you’ll no longer be covered for:
- Liability insurance. This type of insurance is required by law in Canada if you drive a vehicle on the road and helps cover the cost to repair another person’s vehicle if you cause a car accident.
- Accident benefits coverage. This covers any injuries that you or others sustain in a collision.
- Uninsured auto coverage. If you are involved in an accident with an uninsured driver who is entirely at fault for the collision, this policy will provide coverage for damage to the car or injury to those involved.
- Direct compensation property damage. This portion of an auto insurance policy covers damage to your car if you are not at fault for the accident.
Check out what is third-party auto insurance.
In BC, there is a storage policy that would still be required. So, even if you don’t need your car for a while, it would still require a storage insurance policy in place, according to ICBC; a public car insurance provider in BC.
Having storage insurance is important because it will provide coverage in the event that your car is ever stolen or damaged while parked. You can also include collision and liability insurance to a storage policy if you so choose.
Keep in mind that it is illegal to drive your car with no insurance, so even if you drive the car around the block, you could be in trouble if you’re ever pulled over. As such, if you ever need to take your car out for a drive, be sure to have your policy reinstated first.
At the end of the day, you may be able to pause your policy if you won’t be using your car for at least 30 days or more, but you should still retain comprehensive coverage for the car in the meantime. Your options will depend largely on what your particular insurance provider and auto lender allow.
Find out what is gap vehicle insurance.
Before You Put Your Insurance On Hold
There are a number of factors to consider before putting your car insurance policy on hold:
- Find out if there are any fees associated with having your policy reinstated.
- Verify whether or not your premiums will increase when your policy is reinstated.
- Make sure your policy is not fully cancelled.
- Don’t take your car out for any reason with no insurance on it. Even for short rides, reinstating your policy will be required.
- You should still have some form of coverage, even if your car is just going to stay parked for a while. That way you’ll be protected against damage and theft even when the car is not being driven.
- You may still need to keep collision and comprehensive coverage current on your car if you bought it using a loan. Check with your lender first.
Pros And Cons Of Pausing Your Car Insurance
There are some perks to pausing your policy if your insurance provider allows it, including the following:
- You can save money during the time that your vehicle is parked.
- Your car will still be protected even without a fully comprehensive policy in effect.
- You’ll avoid gaps in coverage that could leave you vulnerable to risk if your policy is cancelled.
At the same time, there are also some drawbacks that you should consider if you choose to pause your policy:
- You may not be eligible to suspend coverage if your car was purchased on a loan and your lender forbids it.
- Your insurance provider may not allow a pause in coverage without cancelling the policy altogether.
- You’ll be liable if you take your car out without reinstating your policy.
Alternatives To Putting Your Car Insurance On Hold
There are plenty of other options aside from pausing your auto insurance policy if you’re not planning to drive your car for a while:
Modify your policy. Rather than pausing your policy, consider making some changes to it that can save you money while still ensuring that your car is protected. You can reduce your coverage so your car is still protected while being stored without leaving yourself vulnerable to risk without adequate coverage. Your policy will remain in force, but you won’t have to pay for optional coverage that you don’t need while your car is parked.
Find out if you should get extended warranty.
Increase your deductible. If you choose a lower deductible, your premiums will be higher. If you want to reduce your premiums to save money, consider raising your deductible amount.
Ask about discounts. Call your insurance provider and inquire about any discounts that are available to help cut down on the costs of insuring your vehicle. Insurers often offer discounts to drivers who put minimal mileage on their cars. Since your car will be parked and won’t be driven, perhaps your insurance provider may offer you a discount for fewer kilometres driven.
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Can You Get Your Money Back If You Pause Your Car Insurance Policy?
No, you won’t get your money back if you choose to suspend your car insurance. That said, you could get a credit that you can put towards future coverage, depending on what your insurance company allows.
Do you offer rideshare? Find out if you need rideshare car insurance?
If you don’t have to drive your car for a while, it may seem like a waste of money to continue having it insured. In this case, you may have considered pausing your insurance policy. While putting a hold on your policy may not be possible, you can still look into pausing your liability coverage while still keeping comprehensive insurance intact to protect the car from damage. Be sure to speak with your insurance provider to find out what you can do to cut down on coverage and your premiums while still ensuring that you stay protected and within the requirements of the law in your province.
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