My fiance is financing a car that is currently down and unable to be driven. Can he temporarily cancel the insurance and keep the car?
The short answer is no for two big reasons. One; that’s not how insurance works. Two; financed vehicles must be insured at all times. Let’s explore more.
You can not temporarily cancel an insurance policy – it simply doesn’t work that way. It’s either active or inactive. Now, having continuous insurance is typically a big rating factor for most companies and will get you a lower rate. The longer you have insurance without a lapse in coverage the better your rates will be. Some companies will offer “storage insurance” if the vehicle is not being driven, for a lower rate. You would want to contact your specific company to see if this is an option.
The other thing to keep in mind, is thatliability insurance is required on all registered vehicles, even if the vehicle is not being driven. So, by canceling your coverage, you run of the risk of having the registration for that vehicle being suspended and you being fined.
The second key point and the more important thing to consider is your vehicle is financed. Since the vehicle is financed, most finance companies will require you to have comprehensive and collision, also known as full coverage. The reason being, if something happens to the vehicle, the finance company needs their investment protected.
The best thing to do in this situation would be to contact your finance company to find out their requirements in this situation and also your insurance company to see what your coverage options are. Good luck.