Since most of us pay for our car insurance monthly, it might sound like a good idea to put your insurance on hold now and again – leaving your car parked in the garage and keeping a bit money in your pocket.
The problem is, recent changes in the law mean it’s not always that simple to just to put your car insurance on hold. Here, we’ll look into what’s possible – and some of the issues you might run into.
Why would you need to freeze your car insurance?
Car insurance is often a fairly large monthly payment that leaves our accounts – and it can feel like wasted money if you’re not driving your car.
As a result, thousands of people looking into pausing their car insurance – whether that’s for a week or two while you’re away on holiday – or for much longer periods, perhaps while your car is off the road, while you’re using a different vehicle, or even if you’re recovering from an injury or illness that’s left you unable to drive.
The problem is, there’s no facility offered by insurers to temporarily suspend your policy – and a big part of why relates to the law surrounding car insurance.
What does the law say?
While there’s no law stating that you can’t pause car insurance – there is a very clear law that states every vehicle registered for use on the road must be insured. Continuous Insurance Enforcement became law in 2011, and it means your vehicle must either be insured – or on the DVLA’s Statutory Off-Road Notification (SORN) register.
As such, you’ll struggle to find any insurance company who will simply let you call and put your cover on hold.
Your insurance payment agreement
Of course, it’s not just the law that’s standing in your way if you want to put your insurance on hold – there’s also how you pay for your insurance.
Single the majority of people pay for their insurance monthly; you’re signing up to a credit agreement with your insurer or a finance company they work with. At the point of purchasing your cover, you’ll usually agree to 10-11 monthly instalments that spread the cost of your policy out.
Insurers can’t simply pause and restart this agreement – especially since they often work with another company to offer this facility.
Am I tied into this agreement with my insurer?
Although you’ve signed an agreement to pay your policy over the year, there’s nothing tying you into your car insurance provider. So, in much the same way you can cancel your insurance if you sell your car, you could call your insurer, tell them you’re taking your car off the road, and have your policy cancelled.
Be warned, virtually all insurers will make a charge if you decide to do this – but you’ll need to talk to your specific cover provider to get a full breakdown of what that cost will be.
Is it worth cancelling and restarting your policy?
If you’re leaving your car on the drive while on holiday for a couple of weeks, it’s almost certainly going to be much more hassle and cost than it’s worth to cancel your insurance to simply try to save half a month’s insurance premium.
Of course, if you do – you’re also leaving your car uninsured – so while you’re not going to crash it, you can’t be certain that it won’t be damaged or stolen.
That said, there are instances where cancelling or significantly downgrading your cover will make sense. Examples might include:
- Classic car owners who only drive their vehicle through the summer month and don’t require fully comprehensive cover for all 12 months
- People who spend a lot of time overseas – returning to the UK for just a few months each year
- Students who only use their vehicle through the summer months between academic years
- If you know you’re not going to be using the car between the point of cancelling your policy and the end of your cover
In truth, insurance companies often have specialist facilities in place for these kinds of circumstances – so it’s often better to talk about this upfront, rather than simply sign up for cover and cancel it further down the line. For instance, specialist classic car insurers will know that many vintage cars don’t get used through winter – and providers who offer student policies understand that lots of young drivers only use their car’s between semesters.
So, is it worth cancelling your policy in an attempt to save some money?
The answer really depends on two things:
- The length of time you won’t be driving your car – you should talk to your insurer to find out the costs you’ll incur (and you should consider the cost of starting a new policy too) – but generally, anything less than 2-3 months is unlikely to make financial sense.
- Whether or not it’s safe to leave your car uninsured during this time. Remember, uninsured means you won’t receive a penny if your car catches fire or is stolen.
It’s also worth remembering your car must be declared SORN from the moment your insurance ends – otherwise you could find yourself open to fines and prosecution.