Can I pause my auto insurance coverage?

If you don’t drive your vehicle for a few weeks or months, you can change your car insurance to save some money

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The holiday season means different things to different people. Globetrotters look forward to this time of year to explore the world. From long-distance travel to meeting families living abroad, this time of year is associated with an increase in travel expenses.

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Assumed rising cost of living is undoubtedly something many Canadians are struggling with with managing budgets and trying to reduce expenses wherever possible. If you’re busy budgeting for your next trip, changing your car insurance could provide the savings you need.

If you’re sure you won’t be driving your vehicle for a few weeks or months, you can change your auto insurance policy to save some money. Removing the road cover from the policy or terminating it for a period of time are two options. However, there are certain considerations in both cases.

Remove collision protection from your car insurance

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“An auto insurance policy is designed to fully protect the vehicle from unfortunate incidents such as collision, theft and fire damage,” says Anne Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada.

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“If your journey is disrupted, you can remove road coverage from your policy and simply include comprehensive coverage. This way your vehicle is still protected against other risks such as theft and fire damage. You can contact your insurance professional and ask for this change.”

This policy change can be in effect for either a few weeks or even a few months, depending on your needs. Changing your insurance policy to comprehensive insurance only offers two benefits: first, your premium will go down, and second, you still have an active insurance policy to protect your vehicle against certain perils.

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Cancellation of your car insurance

Conversely, if you choose to cancel your insurance altogether, this will result in a gap in your coverage for that period. However, some people may find this to be the more viable option, especially if you may be abroad for an extended period of time.

In this case, your insurance cover will be suspended and you will have to take out a new policy when you return. But does the coverage gap increase your premium?

“Normally, an insurance company will not hold up the gap if there is no negative reason behind it,” says Thomas. “If your coverage is suspended for reasons such as non-payment of premium or suspension of your driver’s license, you may have to pay a higher premium when you buy a new policy. But just because you canceled your policy because you were abroad shouldn’t be a problem.”

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Thomas adds that any of these insurance policy changes should only be made after a thorough discussion with your broker or agent. “The professional won’t know about your circumstances, and you may not be aware of all the discounts available,” she says. “It is therefore advisable to have an in-depth discussion with your insurance specialist.”

More ways to save on car insurance

Looking for other ways to save on your car insurance premium? Thomas has some tips:

  • Take a look around to make sure you get this cheapest rate for your car insurance. Not every company offers the same reward for the same driver profile.
  • Try usage-based insurance for your car; Many companies offer discounts if they can monitor your driving behavior.
  • Some insurance companies offer pay-as-you-drive options, where you only pay for the time you use your vehicle.
  • Take a minute to do an insurance check with your insurance expert. Explain your circumstances and ask what discounts are available to you. is a free and independent rate comparison website that allows Canadians to compare rates on various financial products such as auto and home insurance, mortgages and credit cards.

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