Can I pause my car insurance?

Whether you're going on an extended vacation, storing your summer car for the winter months, or saving money by taking public transit, you may be wondering, "Can I pause my car insurance?" The short answer is not exactly. But, before you panic, there are options.

"Pausing" car insurance coverage typically refers to temporarily suspending some or all of your coverage for an extended period while your vehicle isn't being used. However, Canadian insurance laws don't permit a true pause in the way you can pause your Netflix or Spotify subscriptions. Instead, drivers can opt to purchase storage insurance or a suspension of coverage endorsement. But these rules will vary depending on which province you live in, as insurance is provincially regulated.

In some provinces, like Ontario, you can drop your third-party liability coverage. But the catch is that you need to surrender your licence plate to ServiceOntario for the time being. In British Columbia, on the other hand, ICBC offers storage insurance, which includes comprehensive coverage, while excluding liability protection, without the need to surrender your plates.

Common scenarios where people want to pause their car insurance policy

Putting a pause on different types of auto insurance is more common than you think, and there are several legitimate reasons why you may want to do this:

1. Seasonal vehicle storage

Anyone living in Canada knows that the wintertime is rough in terms of weather and driving conditions. If you own a motorcycle, classic car, or sports car, you likely want to store your vehicle away for the winter. And because they aren't being driven, it makes sense why you wouldn't want to pay the cost of a full insurance premium.

2. Long-Term travel plans

Taking a vacation for an extended period? If you're planning a trip abroad, keeping full coverage for your vehicle during this time might seem like a waste of money.

3. Military deployment or work relocation

Military personnel or remote workers might not need their vehicle for extended periods. By pausing liability insurance, you can reduce your monthly premium.

4. Post-Accident or vehicle sale

If your car is inoperable as a result of an accident, you're rebuilding it from scratch, or waiting on someone to buy it, collision coverage or liability may not be worth having for the time being.

5. Personal financial situation

Car insurance costs are expected to increase by 7% in 2025, according to Bankrate. In fact, between January 2023 and January 2025, the average cost of a full-coverage auto insurance policy increased by $625, or $26 per month. This indicates a more than 30% increase.

Depending on your driving habits and financial situation, paying for coverage may not be worth it if you're trying to save money.

What insurers allow: Temporary suspension of coverage/parked vehicle coverage

Although most insurance companies don't allow you to pause car insurance, they do offer alternatives that provide similar benefits if you're not planning on using your vehicle:

Parked auto insurance/storage insurance

Many insurance providers offer parked vehicle insurance coverage. It usually eliminates liability and collision but keeps comprehensive coverage to ensure your car is protected against theft, vandalism, fire, falling objects, and weather damage.

Suspending liability

Ontario is the only province that allows you to suspend liability under the suspension of coverage endorsement,t also known as OPCF 16. For a reinstatement of your car insurance policy, you would need to file an OPCF 17 form and collect your plates from ServiceOntario.

Policy cancellation and reinstatement

You can pause your insurance policy with your insurer, but there are consequences. For example, this can lead to higher rates later on, as insurers view lapses in coverage negatively.

A full cancellation also removes all protections. So, if your car is stolen or damaged, you would not receive any form of compensation from your insurance company for repairs or replacements.

How to pause car insurance

If you believe pausing your car insurance policy is the best option for you, here's what you need to do:

1. Contact your insurance company

Contact your insurance company and let them know that you would like to pause your car coverage. They may ask for details on why you want to suspend your insurance. Ask if they offer comprehensive-only or parked vehicle coverage.

Note that some insurers may request written documentation to make changes to your car insurance, while others allow you to fill out the request online.

2. Follow provincial regulations & remember the risks

Remember that what you do after putting your insurance coverage on hold will depend on which province you live in. Make sure you follow provincial regulations to avoid legal consequences.

3. Don't forget to reactivate your car insurance

Before getting back on the road in the future, remember to contact your provider and reinstate your vehicle insurance. Remember, driving without insurance is illegal in Canada and can result in penalties that are recorded on your driving record.

Risks and Downsides: lapses, penalties, and legal issues

If you're looking to reduce costs, dropping your vehicle insurance can be appealing. But, before hitting the pause button, remember the potential downsides we've listed for you below:

• Gaps in insurance history: Cancelling or pausing coverage can create a lapse in your insurance history, which is often seen as a red flag with insurers.

• No Protection from theft, fire, vandalism, or other damages: Vehicle is damaged or stolen while in storage? You're financially responsible for all costs.

• Legal implications: Driving without insurance is illegal in every Canadian province. In Ontario, for example, driving an uninsured vehicle can result in fines up to $50,000, licence suspension, and vehicle impoundment.

Alternatives to pausing

If a full pause isn't possible, here are some other alternatives:

• Comprehensive coverage only: Drop your liability, accident benefits, and collision and stick with comprehensive coverage to protect against non-driving risks.

• Low-Mileage insurance: Some insurers offer usage-based insurance or discounts if you drive under a certain number of kilometres annually, which can lower your costs.

• Bundle your polices: Bundle your home and auto insurance coverage to save on your premiums.

• Opt for basic coverage: If you aren't able to pause, opt for basic coverage minimums to reduce costs.

Province-By-Province breakdown

The table below provides a breakdown of rules and options by province:

The bottom line

While you can’t exactly “pause” your car insurance in Canada, there are safer, legal ways to reduce your premiums if you don't plan on using your vehicle. From comprehensive-only coverage to storage insurance, your options will depend on your province, insurer, and the reason behind the pause.

Before making changes, always speak to your provider, understand provincial laws, and weigh the risks. If you have questions about pausing your current coverage or other questions about car insurance, the experienced brokers at BrokerLink are here to help.

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