While car insurance is required to drive on any road in Canada, car insurance itself can protect you and your vehicle even when you’re not on the road or even in motion. This is something that people overlook when taking a car off the road, perhaps for seasonal driving or to modify or repair the car over a period of time. Rarely is having no insurance a good idea, and in fact, the money you save now may not prove to be saved over the long term.
Components of Car Insurance
Each province has a minimum mandatory amount of car insurance coverage, usually third-party liability coverage so that anyone injured in an accident has money available for treatment. This is, however, really only about 1/3 of the average car insurance policy. The other two parts are collision insurance, which covers the costs to have your car repaired after an accident, and comprehensive coverage, which protects against things such as theft, vandalism or damage from something other than a collision. Occasionally, collision and comprehensive insurance will be combined in something called all-perils coverage, since it can protect against pretty much anything your car can be insured for.
As well as these three main components, riders or endorsements can be added to policies to extend features and benefits. For example, non-owned vehicle endorsements cover you through your own policy when you rent a car. Another type is income loss protection in case you miss time from work. Between the major components and endorsements, insurance coverage can be tailored tightly to your needs.
Suspending Car Insurance
Once your car is parked, you can, of course, cancel your insurance entirely. If this is an extra vehicle, there won’t be problems with your personal situation, provided you are listed on the policy of your main vehicle. If you’re not on a policy for the period that your car is parked and uninsured, you could be flagged as a high-risk driver, since insurance companies see gaps in coverage as a potential risk factor. Your premiums could skyrocket.
Your parked car isn’t immune to risk either. Should the car be vandalized or damaged in a fire or hailstorm, for example, removing insurance means you must bear any repair or replacement costs yourself.
Suspending insurance on your parked car may be the optimal solution. Remember how only 1/3 of your coverage is actually mandatory? Working with your insurance company, you could modify your coverage to include only the mandatory coverage. This would give you the lowest premium possible without interrupting insurance coverage.
Collision coverage is probably not necessary since you aren’t driving the car, but adding back comprehensive coverage can reduce your financial obligation should something happen to your car while it’s parked. When your car is ready to go back on the road, contact your insurer and restore the coverage you need. Suspending partial coverage saves you early cancellation fees and maintains driving history and insurance protection at the level you need.