You already know that you need to have car insurance in place whenever you are behind the wheel, but what happens when you are not going to be driving for awhile? Maybe you are going away to college and will be living in a city with a great public transportation system. Maybe your car just died and you are currently relying on the kindness of friends and family to get around. No matter the reason for your non-driving status, you are probably wondering if you should cancel your car insurance and save some money.
The problem with that strategy is that you could be sacrificing long-term savings for a short-term windfall. Canceling your car insurance now might save you some money, but since insurance companies look at gaps in coverage when determining premiums, you could be setting yourself up for higher rates in the future.
In fact, a lengthy gap in car insurance coverage could put you in the high-risk pool when you start shopping for a new policy. The high-risk pool comes with some of the highest premiums around, and that could cost you a lot of money.
Getting labeled as a high-risk driver could even make getting insurance more difficult. You may need to settle for the one company willing to insure you, and that could drive the price even higher.
If you plan to be a non-driver for an extended period of time, it might make sense to retain your policy. You may be able to save some money by contacting your agent and explaining the situation. Since the number of miles you drive each year is one of the factors used to determine your premium, your rates could go down significantly when you cease driving on a regular basis.
It is just as important to avoid an inadvertent lapse in coverage. If you fail to pay your premiums on time or you lose your license, future car insurers will see that as a lapse in coverage and price your new plan accordingly.
Concerned about an insurance gap? If, so make sure to contact your Kaplansky Agent to discuss your concerns or a request a review of your insurance needs.