What does suspending a car insurance policy mean?
When you suspend a car insurance policy, you freeze the insurance, so to speak. As of the date of the sale, the insurance is stopped. As soon as you have a car in your name again, you can reactivate the insurance. So you don't have to reapply for insurance. It's just a matter of putting the new car on the policy. So it offers convenience. After selling your car, the buyer will give you a release certificate. With this you can terminate or suspend the car insurance. Usually the preference will be to terminate the car insurance. You will get back the overpaid premium and when you buy another car you will compare insurers again anyway. Probably you will be better off with the newly purchased car in terms of conditions and premium with another insurer.
Why is termination better than suspension?
You choose the best car insurance after a thorough comparison. Maybe insurer X is the most suitable option for your old car, but not for the new one. If you go for the highest quality at the lowest premium, you will compare again for a new car. This means that suspending your car insurance makes no sense. For the new car, you will still have to recalculate what you owe monthly or annually for the other car.
What happens to your claim-free years when you quit?
After the termination, the insurer issues a policy which shows how many claim-free years you have built up. When insuring a different car, you can put these years back in. Please note that the accrued claim-free years are only valid for three years. There are even insurers who use a shorter period. After this period insurers strangely enough do not take the claim-free years into account anymore. This means that you lose your right to a discount.
When to choose suspension?
Drivers who have accumulated negative claim-free years in their current insurance can often choose to suspend their car insurance instead of terminating it. Negative claim-free years are built up by claiming for damages. If you do cancel your car insurance, you might run into the problem that you cannot take out a new insurance. Many insurers are not open to policyholders with a bad claims history. Insured persons with a criminal record can also encounter the same problem.
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