Seasonal car insurance: how to insure your summer vehicle

The official start of summer is fast approaching, which means if you have a vehicle you use only in the warmer months, it's time to secure car insurance.  

Each province and territory has its own licensing regulations for seasonal vehicles, so you must visit your government's website for more details. However, we can tell you that if you plan to drive your car on public roads in Canada, you will always be required to carry third-party liability insurance. In the event of an accident, it covers damages and injuries to another person or vehicle, as well as medical expenditures, lost wages, and legal fees.

But is there such a thing as car insurance for summer only? In other words, do you need insurance if you don't drive your vehicle during the winter? We break down how seasonal auto insurance works below.

What is seasonal car insurance?

"There's no such thing as seasonal car insurance in Ontario," says Sara Caruana, service team leader for DirectRate.ca.  

There is such a thing as short-term auto insurance, however, but not many insurance companies provide it. 

"The standard auto insurance policy in Canada has a one-year term," says Caruana. "But some companies out there will write six-month policies."

Since short-term policies are difficult to come by, Caruana suggests contacting your potential insurance provider directly to find out if they’re available.

If you go over 24 months with no insurance, that will erase your insurance history for some carriers

According to the Insurance Bureau of Canada, even if your seasonal vehicle is not in use, you should have comprehensive coverage on it all year-round to ensure that you’re covered in the event of unforeseeable events, such as an accident, fire, or theft. A car insurance provider will almost certainly require you to have some level of coverage on your seasonal vehicle all year round.

As soon as you know when you need the coverage to begin, get in touch with an insurance broker or agent to work out the policy's effective start date. 

"Depending on the insurance provider,” says Caruana, “you can get an effective date up to 30, 45 or 60 days in advance.” 

Cancel your policy early, but beware of the cons

Although you have the option of cancelling your auto insurance policy come the winter when you’re no longer driving your vehicle, Caruana strongly advises against it.

For starters, you will likely have to pay a fee to have your coverage cancelled before the end of your current policy term. 

Second, you can only cancel your policy if you're confident you won't drive the car at all while it's not covered. Driving without insurance is illegal, and if you’re caught doing so, you could face serious consequences, such as fines, or even a driver’s licence suspension for up to a year.

Thirdly, if your car is stolen or damaged while in storage, you won't be insured, and you will have to pay for the damages and replacement costs out of pocket. 

Before making any decisions, consult your broker. You may have a few more options for a car that you use in the summer and store in the winter

And lastly, when you go to purchase auto insurance for the next summer, your premiums may increase because there’s a gap in your insurance history. Caruana says depending on how long you've gone without insurance coverage, you might even be considered high-risk by insurance providers. That's why she urges drivers to stay continuously insured and not have any gaps. 

"Some carriers won't even want to offer you coverage if you own a vehicle but don't insure it for 12 months," she says. "If you go over 24 months with no insurance, that will erase your insurance history for some carriers."

An alternative option for summer car insurance is to add the necessary coverage for the months of the year that the car will be used and then remove it from your policy in the winter months, but still keep the policy intact. 

During non-driving periods, change your coverage 

To avoid this, Caruana recommends changing your coverage during the non-driving months if you only drive for a portion of the year.

For instance, you can significantly cut your monthly premium by dropping collision coverage (which covers damage to your vehicle in the event you collide with an object or other vehicle) and liability coverage in the winter months, and keeping comprehensive coverage. 

Comprehensive coverage covers your vehicle in the event of theft, fire, vandalism, falling items, natural disasters, or other damages while it is stationary. In a nutshell, it safeguards your vehicle when it’s not in use. 

Before making any decisions, consult with your broker. You may have a few more options for a car that you use in the summer and store in the winter. For instance, if your vehicle is more than 10 years old, you may be eligible for classic car insurance. In this instance, your classic car may be classified as a seasonal vehicle by your insurance provider because you only need a minimal amount of coverage when it's parked. 

Car insurance discounts for seasonal vehicles

When looking for low-cost summer vehicle insurance, the same principles apply to shopping for low-cost, long-term coverage. 

There are also several opportunities to score discounts on your car insurance. For example, if you need student car insurance for the summer, you can get a discount for maintaining good grades. Drivers can also earn discounts for combining various insurance products with one insurance provider, installing a telematics device/app, being a senior, insuring multiple cars on one policy, and opting for a higher deductible.

Even if you only need basic auto insurance, you should still shop around and compare rates from several companies to find the best deal for your summer ride.