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Why NOT to cancel Car insurance in USA when on Vacation to Home country?

In What NOT to Do in US by Kumar14 Comments

Some of us tend to cancel our car insurance or rather not renew it when we are traveling home country for vacation. The simple logic for most of us is that we are NOT taking the car on road, why bother to pay for insurance. Unfortunately, even though logically it seems correct, sometimes you can end up in complicated situation where you may regret it. Let me share you an incident that happened to a friend of mine and why you should not cancel your car insurance, when on vacation.

Actual incident – Expired car insurance on Vacation

It just happened that a friend of mine left to India for vacation…as he was leaving for vacation, he did not pay much attention to renew his car insurance… logically most of us think, we are not driving during vacation, why bother to pay for insurance?   The car insurance expired around couple weeks after he left for vacation. He came back to US after four weeks of vacation…On the day he lands in US, he wanted to buy some stuff, so picks up his car keys and goes to the parking lot where he parked the car…Guess what ? There is NO Car…he rushes and comes and asks his roomies about car, they say they do not know… because, they never checked the car as he forgot to tell his roomies to watch the car when on vacation… He asks few people around if they saw the car, no one gives any positive info…

If you look at the situation, unfortunately, there is nothing much he can do…other than telling police that he lost his car and give the car information…. He cannot really call the insurance and tell them that he lost his car and ask them to pay money or give a new car because the insurance expired …The tricky part is, no one exactly knows when the car was stolen…. so he cannot really report to insurance saying that his car was lost during his insurance coverage. Some of you may think, what if you report that car was stolen when he had coverage ? Suppose, they trace the car and figure out that it was stolen when the insurance was expired, the guy is in trouble for telling false information to police…the situation here is very complex and you cannot really do much…we can talk few other scenarios, but not very fruitful results…

Lesson : Do NOT cancel car insurance when on vacation in home country

One way to avoid this complex situation is to make sure you have your car insurance coverage active even when you are out of country…If you think the insurance is about to expire, you should renew it so that it fully covers your car, when you are out of country. Also, it is a good idea to talk to insurance about this kind of scenarios and seek their advice… This problem might only arise when you have an open parking lot…if you do have underground and restricted parking, you may not end up in this kind of complex situation….but still, what if someone tries to steal something like car rims or any other car related parts ? I think it is worth to have car insurance coverage active when you are out on vacation.

What do you think ? Do you have any other car insurance related incidents to share ?

Image Credit : http://car-insurance-auto-insurance.org/farmers-car-damage-insurance-brokers.jpg

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Comments ( 14 )

  1. Hib2014

    Hi,

    What will be the cost involved to get a Car Insurance in San Jose, CA for lets say a Leased Hyundai Elantra. Given that i will be around 30 years of age. I have been driving in India for 10 years with Zero claims, if that makes a difference.

  2. Prashant

    Another point why not to cancel your car insurance when on vacation:

    In many states (like NC), you need to have continous insurance coverage (at least liability) in order to retain your license plate issued by DMV. If you dont maintain a coverage you will need to return your license plate, else you are violating the law.

    As someone mentioned above, call the insurance company and let them know that the car will be parked. Safest option.

    Regards,
    Prashant

    1. administrator
      Kumar

      Prashant,
      Thanks for sharing. I think it is a good idea to check the respective state laws as it seems that insurance coverage rules vary by state.

    2. Angel

      Hello,

      We just came back from india. We stop our insurence for 1 1/2 month. Once we came back we have to return Licence plate for all 3 cars and we cant drive untill 3 month. Can you beleve it? OMG I N THAT CASE OUR INSURANCE SHOULD HAVE TO TOLD US SITUATION THEN WE WANT STOP OUR INSURANCE….. B.T.W THIS IN PA…..

  3. Heidi

    There is one thing that you should note about car insurance. If you are leaving the country for extended periods of time (I’d say 3 weeks or more), you can call your insurance company and tell them that the car will be parked until further notice. Usually, this will get you a major discount on your insurance (since the car is not moving, it is less of a liability) while still covering you for things like theft. Just make sure that you notify them as soon as you return so they can reinstate your normal car insurance and keep you covered for everything.

  4. Santosh Kumar

    You really provide very useful information for a person like me who is new to this country. I follow your website regularly.
    It would be nice if you can update your website with at least 1 article a day.

    Thank You.

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