Is it bad to remove a car from insurance?
It is not always bad to remove a car from an insurance policy, just be careful not to go without coverage, or you risk an auto insurance lapse, which causes rates to increase by up to 35% on average. So if you‘re shopping around for new coverage, don’t buy auto insurance after removing a car but instead secure new coverage before canceling your old policy. If you remove a car from an insurance policy because you sold the vehicle, you can typically do so with no consequences.
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UPDATED: Dec 6, 2021
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- It is not wrong to remove a car from insurance if you no longer own the vehicle in question
- It can, however, be a mistake to remove a car from insurance without securing proper coverage first; otherwise, you risk a coverage lapse and a rate increase
- It is also illegal, in most states, to drive without insurance
Perhaps you recently sold your car or are simply shopping around for new auto insurance. You may be wondering, “Is it bad to remove a car from insurance?”
It is not always wrong to remove a car from an auto insurance policy. If you no longer own the vehicle in question, you can typically remove a vehicle from your auto policy with few consequences.
But, if you own other cars or want to switch companies, don’t look for a new auto insurance company after removing a car. Instead, secure new coverage before canceling the old; otherwise, there may be consequences.
Most state laws require drivers to carry some level of liability auto insurance. Plus, a coverage lapse could lead to higher auto insurance rates in the future. So keep reading to learn how to remove a car from your auto insurance.
How to Remove a Car From Your Auto Insurance Policy
You should know how to properly remove a car from your insurance policy to avoid any negative consequences.
For example, if you bought a new car, you can usually replace a vehicle on an existing policy either online or by contacting an agent.
Some companies even allow you to remove and replace vehicles directly in your auto insurance mobile app.
If you remove a car from an insurance policy that you still own and plan to drive, secure new coverage before canceling your current insurance; otherwise, you risk experiencing a coverage lapse. A coverage lapse means that a car you own was not protected by auto insurance for a certain period of time.
The top auto insurance companies almost always verify your insurance history when underwriting quotes. So, if there’s a coverage lapse, it looks like you irresponsibly chose to drive uninsured.
This makes you a high-risk driver in the eyes of insurance companies. Therefore, a coverage lapse may impact your auto insurance rates after improperly removing a car from your policy.
While a lapse of only a few days typically does not affect your rates too harshly, a coverage gap of 30 – 60 days leads to a rate increase of up to 35%.
Similarly, depending on the laws where you live, canceling an auto policy on your car before securing new coverage could lead to legal repercussions.
Most states require drivers to carry some level of auto insurance. According to the Insurance Information Institute (III), the consequences of driving without insurance includes fines of up to $5,000 and possible jail time.
What about other people living under your roof? You may want to know if your auto insurance rate will decrease when you remove a driver.
It depends on the person in question. But, typically, removing high-risk individuals from your policy reduces your insurance costs. We’ll cover this in more detail later on.
Now that you’ve learned how to secure affordable auto insurance after removing a car from your policy, remember to enter your ZIP code into our free rate tool above to compare quotes from the best companies near you.
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Should you remove a car that you’re selling from your insurance policy?
You should also know when to cancel insurance after selling your car to avoid any negative consequences.
Simply maintain insurance coverage on the vehicle until you finalize the sale. That way, interested parties can take it for a test drive. Plus, you can deliver it to the buyer without receiving any tickets or citations for driving uninsured.
If you plan on buying a new car right away, you may want to keep your insurance policy to avoid losing loyalty auto insurance discounts.
However, if you do not own another vehicle but plan on driving, look into non-owner auto insurance policies.
Fortunately, non-owner policies tend to cost less than traditional auto insurance because they only provide basic liability coverage.
Otherwise, you may not need auto insurance if you don’t plan to drive and do not own a car.
Can you remove a driver from your insurance policy?
Typically, you can remove drivers from your auto insurance policy. In addition, insurance companies usually accept something called named driver exclusions.
A named exclusion essentially guarantees that the person in question will never drive the vehicle you’re insuring, so your auto coverage does not apply to them.
If they breach the contract and drive your car but get into an accident, your insurance does not cover the damage. Understand that this leaves you responsible for out-of-pocket expenses.
Does removing a driver lower insurance costs overall?
It depends. If the person is a high-risk driver, like someone with an unstable driving record, removing them typically lowers your rates. However, if you earned any discounts by adding that person to your policy, you’ll lose those deals after removing them. Otherwise, it’s typically fine to remove anyone from your policy who does not drive the insured vehicles.
Is it Bad to Remove a Car From Insurance: The Bottom Line
It is not necessarily wrong to remove a car from insurance, especially when you understand the proper ways to avoid negative repercussions.
If you no longer drive or own any cars, you may not need traditional auto insurance at all.
Alternatively, if you no longer own a car but still drive other vehicles, nonowner policies may be available to you.
Finally, a coverage lapse may impact your auto insurance quotes after removing a car from your policy if you do not secure new insurance beforehand. So shop around and purchase a new policy before canceling your old one.
Now that you know the best way to buy auto insurance after removing a car from your policy, enter your ZIP code into our free quote comparison tool below to receive rates from reputable companies in your region.