Car Insurance tough to restore

Thinking of dropping your automobile insurance policy for a few months? Think again. Saving money by dropping a policy can backfire if the company raises your rates or turns you down when you try to reinstate your coverage. There are, however, ways to save money and avoid problems.



Even if you aren't driving your car, keep some coverage. That's what Robert Dean, an Army surgeon from Washington did while he was stationed at a combat-support hospital in Iraq. Before he left, Dean called his insurer, USAA, to report that he'd be storing his BMW convertible in a garage. ``They recommended not stopping the coverage because the car could still be damaged,'' he said.



Because nobody would be driving the convertible while Dean was in the desert, USAA did slash the mileage limits, which lowered the premium by about $150 every six months. And there was no issue about his resuming full coverage at the regular rate when he returned.



You may be able to lower your premium further with ``lay-up coverage.'' That eliminates all coverage except comprehensive, which protects against theft, fire and other damage even when the car isn't being driven. Ratcheting down to just comprehensive coverage can cut your premium by about 75 percent, said Diane Cottingham, an insurance agent in Underwood, N.D. But this isn't an option for everyone: Some states require that you keep liability insurance unless you turn in your tags. And even if state law doesn't demand it, some lenders do until your loan is paid off. In that case, you can at least reduce your premium by cutting your liability limit to the bone and raising your deductible while your car is being stored.



If you have dropped coverage, be sure to explain your situation when you apply for a new policy. Say, for example, that you canceled a policy and left your car in a garage during a six-month assignment in New York, or dropped your insurance for several months while you were recuperating from surgery and unable to drive. ``I would strongly recommend that you share these details with the company because it could very well make a difference,'' said Bruce Maynard, senior assistant vice president for Amica Insurance.



And be sure to shop around. If your original auto insurance company tries to raise your rate when you attempt to restart a policy, see what other insurers will offer you. Companies vary widely in the way they treat a break in coverage.