If you’ve been driving for several years, you already know that auto insurance is essential. It’s also true that your financial circumstances can change in an instant. During a financial crisis, you may decide to re-evaluate your options. If you are looking for ways to cut costs, you might be tempted to avoid searching for lower rates by completely canceling your policy. However, instead of canceling your policy, another option to consider is simply pausing it for the time being.
Reasons to Pause Your Auto Insurance
Auto insurance companies recognize that most drivers have days where they aren’t using their vehicles. There are also some valid lifestyle changes that may cause you to consider pausing your auto insurance. Perhaps you are going on a long vacation, and your car will be parked for a few months. Perhaps you are unable to drive your vehicle at the moment because it needs repairs. Maybe you are trying to avoid a record of nonpayment. In such cases, contact your insurer, as you could qualify for a discount or rebate. The primary goal is to avoid coverage gaps. A gap in your policy could affect your premiums for several years and is also a possible violation of the law.
Canceling Your Policy
Before you decide to cancel your policy, take time to explore all of the possible scenarios. If you are financing your vehicle, you may not be able to pause your policy. Canceling your policy may seem beneficial, but it could leave you vulnerable to out-of-pocket expenses if your vehicle sustains damages. As a result of the pandemic, most insurance carriers understand that people have tight financial situations. Your insurance carriers may offer you a flexible payment plan in order to keep you from losing your coverage. A suspension is better than canceling the policy because it will help you avoid a possible lapse in coverage. Check with your carriers to make sure that you understand everything clearly.
Possible Ways to Save Money
Perhaps you’re unsure about canceling or suspending your auto insurance. There are a few other ways that you can try to save money on your policy. Consider adding higher deductibles, as it will lower your premium. A more risky option is dropping your collision and comprehensive insurance to only pay for liability coverage. You also have the option to lower your liability limits, which means your auto insurance policy would provide less coverage if your vehicle causes third-party property damage.
Consult with Northeastern Group, LTD
Every driver has a unique situation. Perhaps canceling your coverage is your best option, but it’s better to see if there are other options available before making that decision. If you have questions regarding your auto insurance policy, contact the team here at Northeastern Group, LTD, and we will assist you.
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