What You Should Know BEFORE Cancelling Auto Insurance

Tired of paying insurance on that broken down (or wrecked) vehicle? Thinking of selling one to an individual?

Here are some things you should know and do before cancelling your auto insurance.

*Turn in or Suspend your License Plate FIRST! Louisiana Department of Motor Vehicles (DMV) will charge a fee for every day there is a lapse in coverage. This fee begins the same day you cancel your auto insurance! There is no grace period. If you cancel your auto insurance even one day before turning in or suspending your plate, you risk having a flag on your drivers license and high fees to clear that up.

Even if you are selling your vehicle, turn in that plate! You can not transfer it to the new owner. Don’t wait or delay to do this even if the buyer is a trusted friend or family member who insists they’ll do it for you. Too many things can happen and the DMV expects YOU to be the responsible party.

Another option is to obtain an “Affidavit of Non-Use” on the vehicle from the DMV before you cancel the insurance. This allows you to keep your plate but drop the coverage. However, there are strict guidelines! Make sure you understand them before choosing this option.

This Louisiana law applies to all motorized vehicles required to be registered with the state.

*Keep your Proof forever. Whether that is an actual receipt from surrendering your plate, an affidavit of non-use from the DMV, or bill of sale, keep your proof in a safe place (safety deposit box or fireproof safe) and do not destroy it. The state can (and has) gone back through their records for years and flagged drivers for dropping insurance on a vehicle they may no longer own. Another idea would be to scan it or take a picture with your tablet, I-phone or smart phone and file it away on your device – again in a safe place. Even if you choose to do this, it is smart to keep that paper copy also.

Purchasing a used vehicle? Keep your paperwork and proof of insurance forever also. The DMV has been known to flag the current owner of a vehicle when the previous owner cancels his or her policy.

No one likes to pay insurance on a vehicle they no longer (or can’t) drive but beware of cancelling your state required liability insurance on any automobile without taking the proper steps to do so.

The burden of proof is on the vehicle owner!

Doing things in their proper order and keeping your proof, can alleviate or reduce your fines.

Before you consider dropping the insurance on any auto, give us a call so we can make sure you understand your options and obligations.

Until next time, take care and be an informed driver!
Tommy Curtis and Staff