Should you put your car insurance on hold while self-isolating?

The impact of the Covid-19 pandemic is forcing us to review all unnecessary expenses

Published: April 16, 2020, 6:00 PM
Updated: October 11, 2021, 10:10 AM

Protection from natural disaster - Should you cancel car insurance?

As most of us are coming to grips with the need to self-isolate during the COVID-19 pandemic, we’re also facing the reality of payments that still have to be made while income has been reduced or dried up altogether. Among them are payments for car insurance.

For many of us, the amount of driving we’re now doing has shrunk to near zero. And, if we’re in multi-vehicle families, we may have one or more vehicles simply parked for the duration.

Which raises the question, can we put our car insurance on hold, or even cancel it altogether during this time?

The technical answer is, yes we can, although it may not be a simple process, depending on where we live. Different provinces and states have different regulations. The bigger question is should we do so?

According to, an industry-supported website where users can get information on and compare third-party financial products, there may be better alternatives than cancelling, as doing so brings with it inherent risks, as well as potential costs.

Not only will we be without any insurance, there are likely to be early cancellation fees or other charges that may be substantial for mid-policy cancellation. We might also be faced with higher rates later, when we try to renew the policy. It’s important to read the fine print of our policies before making any final decisions.

Protection from theft - Should you cancel car insurance?

Plus, of course, without insurance we can’t drive those cars at all, on any public roads in Canada. It is illegal to do so.

Rather than cancelling outright, according to, many insurance providers are offering a “suspension of coverage” endorsement. It’s easy to implement but we're only able to do this once a year for a specific period. And it means we have no coverage during that period so can’t drive the vehicle at all while coverage is suspended. Again, it’s important to read the fine print.

What might make more sense, to reduce costs during this pandemic shutdown, is simply reducing our coverage to get a lower rate. We could, for example, increase the ‘deductible’ amount of the policy and/or remove optional components such as ‘comprehensive’ and ‘collision’ coverage. We might even consider dropping the ‘third-party liability’ coverage down to its minimum legal requirement. (Typical coverage is for $1-million but minimum requirements vary by province).

Reducing any of those coverages, however, does increase our personal risk. Even if the vehicle is parked, if a tree falls on it or a vandal smashes a window, for example, without ‘comprehensive’ coverage we’re on the hook for the cost.

Protection from Theft - Should you cancel car insurance?

There is also the matter of a lessor or lender to think of. If we are leasing the vehicle, or have a loan for it, we are undoubtedly obliged by contract to maintain insurance coverage to protect the lessor/lender.

Perhaps our best alternative is simply to call our insurance provider to see if there’s a discount to reflect fewer kilometres driven. Some insurance companies are not only making such allowances but promoting the fact.

It’s worth a try. And, if the answer is no, perhaps it’s time to check what another provider might offer. It is a competitive business!