Whether you’re working from home due to COVID-19 or are going away for the winter months, you may be considering putting your car insurance on hold to save money. However, you can’t pause your car insurance in Canada, as it’s mandatory to have insurance if you own and drive a car. But, you can modify your insurance if your car isn’t being driven or is parked for a while.

COVID-19, for starters, is forcing many insurers to adapt to new circumstances. Various insurance companies offer immediate discounts to all of their customers, with most insurers waiving NSF fees and offering to defer payments, so you don’t have to cancel your auto insurance.

Instead, you can lower your coverage to “comprehensive only” or “parked car,” but you need to reinstate it before driving your car. In Canada, driving without insurance is against the law. If you’re detected, you’ll face serious consequences. Your alternatives will be determined by your insurance company and your location in Canada.

In Ontario, for example, putting your car insurance on hold is subject to specific restrictions. To do so, you’ll need to fill out two Ontario Policy Change Forms:

• OPCF16: This form is to suspend your insurance coverage
• OPCF17: This form is to reinstate your insurance coverage

You will no longer be protected for the following things if you suspend your coverage:

• Liability insurance: If you are at fault for an accident, your insurance will cover the cost to repair the other person’s car.
• Accident benefits: Injuries sustained as a result of a collision are covered.
• Uninsured auto coverage: If you are in an accident with an uninsured motorist who is fully responsible for the accident, this policy will cover the damage to your car as well as the injuries to the individuals involved.
• Direct compensation property damage (DCPD): If you are not at fault for the accident, your insurance will cover the damage to your car.

ICBC, the provincial government’s car insurance provider, has a storage policy. They take the example of parking an RV in a driveway for the winter season. You only need insurance if something happens to it when it’s parked. For instance, you’ll still be covered if a tree falls on it or gets stolen.

Storage is a sensible alternative, and it’s much easier to execute, with them allowing you to add collision and liability coverage to your storage policy. Your only concern will be what coverage lacks if you don’t have full coverage.

Bear in mind that driving without insurance is unlawful, so even if you drive down the road, you could face problems if you get pulled over. Therefore, ensure your policy gets reinstated if you ever need to drive your car.

• Check if you’ll have to pay any fees to reinstate your policy.
• Confirm whether there’s an increase in your premiums if your policy gets reinstated.
• Check to see whether your car insurance hasn’t been cancelled.
• If you don’t have insurance on your car, don’t drive it for any reason. Even for quick rides, you’ll need to reactivate your policy.
• Even if your car is parked for a short period, you should still carry insurance. This ensures protection against damage and theft while the car isn’t being driven.
• If you bought your car with financing, you might still need to keep collision and comprehensive coverage active. So check with your lender first.

There are alternative solutions apart from pausing your car insurance.           

• Increase your deductible: Your monthly premium will reduce if you increase your deductible.
• Modify your policy: Instead of putting your insurance on hold, make some changes to your policy to save you money while still protecting your vehicle. For example, you can limit your coverage so that your car remains insured while being stored without leaving yourself open to risk. While your car is parked, your insurance will remain in effect, but you will not be required to pay for optional coverage that you do not need.
• Enquire about discounts: Ask your insurer about any discounts available to help you save money. For example, insurance companies usually provide discounts if you drive fewer kilometres or have your car parked.

If you aren’t planning on using your car for a period, you may have contemplated putting your insurance coverage on hold. While you may not be able to put a hold on your policy, you might consider suspending your liability coverage while keeping your comprehensive insurance in place.

Consult with your insurer to see how you can reduce your coverage and premiums while remaining protected and in compliance with your province’s legal requirements. And don’t forget to compare car insurance with our tool to find the perfect car insurance according to your needs.