While you can cancel car insurance at any time, doing so should only be done under rare circumstances, such as no longer having a car. In an instance where you are leaving the country, it may not be the best decision to outright cancel your car insurance. If you are leaving the country temporarily, say for a year or a few months, do not cancel your car insurance.
Never allow yourself to have a gap in your insurance period. So if you are leaving the United States, you must decide whether to keep your insurance active on the car at home or purchase insurance on a new car in the foreign country before canceling your insurance at home. This ensures there is no gap between insurance coverage, an important consideration for insurance when determining your rates. Furthermore, if you are leaving temporarily and leave you car behind, you should keep insurance on the vehicle because if it involved in an accident -- say someone hits it while it is parked -- your insurance company will handle the situation instead of you.
Lowest Amount Possible
Contact your insurance company to discuss your situation. If you are temporarily leaving the country, explain this to your insurance company and ask for the lowest amount of insurance possible because no one will be driving the car. Each state has different levels of minimum coverage. For example, you may be only able to get fire and theft coverage for your vehicle in one state while another may include vandalism and accident coverage. Either way, you will be paying a lot less than normal. And when you return, you can reactivate your old coverage on the vehicle.
Why Keep Insurance
Keeping your insurance uninterrupted is a preference for insurance companies, which means you may receive benefits or discounts for having uninterrupted auto insurance. Insurance companies may question why you didn’t have auto insurance for a six-month or one-year period. They may label you as a high-risk driver and charge you higher premiums even though you didn’t make any claims. Furthermore, if you are leasing your vehicle, you may be required to have insurance on it at all times. If it is canceled, the lease company may be able to take the car back.
Moving to Different State
Consider these rules even when you are going to a different state. Even though you are still in the United States, car insurance laws differ from state to state. It would still be unwise to cancel your insurance – even for a short period – while moving or temporarily relocating to a different state.