What does it mean to suspend a car insurance policy?
When you suspend your auto insurance, you essentially put the policy on hold. The policy is suspended as of the date of sale. As soon as you have a car registered in your name again, you can reactivate the policy. This means you don’t have to apply for insurance all over again. It’s simply a matter of adding the new car to the policy. So it’s quite convenient.
After selling your car, you’ll receive a certificate of release from the buyer. You can use this to cancel orsuspend yourauto insurance. In most cases, it’s better to cancel your car insurance. That’s because you’ll get a refund for the overpaid premium, and when you buy another car, you’ll likely compare insurers again anyway. You’ll probably find a better deal—in terms of coverage and premium—with a different insurer for your new car.
Why is termination better than suspension?
You should choose the best car insurance after a thorough comparison. Insurer X might be the best option for your old car, but not for your new one. If you’re looking for the highest quality at the lowest premium, you’ll need to compare options again for your new car. This means that suspending your car insurance doesn’t make sense. For the new car, you’ll still need to recalculate your monthly or annual premium for the other car.
What happens to your no-claims years when you cancel your policy?
After the policy ends, the insurer issues a certificate showing how many claim-free years you’ve accumulated. When insuring another car, you can carry over these years. Keep in mind, however, that the accumulated claim-free years are only valid for three years. Some insurers even apply an even shorter period. Strangely enough, after this period, insurers will no longer take your claim-free years into account. As a result, you’ll lose your right to a discount.
When should you choose to suspend something?
Drivers who have accumulated negative claim-free years under their current insurance policy are often better off suspending their auto insurance rather than canceling it. You accumulate negative claim-free years by filing claims for at-fault accidents. If you do cancel your auto insurance, you may run into the problem of being unable to purchase a new policy. This is because many insurers are not willing to insure policyholders with a poor claims history. Policyholders with a criminal record may also face the same problem.
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