January 10, 2022

Do You Need Insurance on a Car That Doesn’t Run?

The pros and cons of keeping insurance on a broken-down car

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The car sitting in your garage that you haven’t driven in years doesn’t need insurance, right? While legally, this is the case, you might still want to have car insurance even on a vehicle that doesn’t run. We’ll explain why, along with some low-cost options, below.

Do You Need Insurance on a Car That Doesn’t Run?

Legally, it’s not necessary to have insurance on a car that you don’t drive because it doesn’t run. However, there are a few good reasons why keeping some level of car insurance is a good idea.

Reasons to Insure a Broken-Down Car

  • Protect against damages: Although it’s unlikely you’ll get into an accident with another car if yours is broken down, you’ll still want to protect against theft, auto vandalism, or a weather-related event like hail or flooding. Comprehensive coverage would reimburse you for costs from these covered events.
  • Prevent a gap in coverage: If the non-running vehicle is your only car, lapses in car insurance coverage could lead to higher rates later on, so unless you have multiple cars, it’s smart to keep some level of coverage for the long term.
  • Keep loyalty discounts: In the same vein, many companies offer discounts for longtime customers. If you cancel your coverage, you’ll lose out on these discounts for future vehicle policies.
  • Required by loan/lease company: If your broken-down car is a loaned or leased vehicle, the company may require you to have comprehensive and collision coverage.

Reasons Not to Insure a Broken-Down Car

  • Save money on premiums: Obviously, if you are canceling your insurance, you are avoiding paying premiums to auto insurance companies altogether, saving you money.

Should You Suspend Coverage for a Period of Time?

One option you have is to suspend your car insurance temporarily, perhaps until you get your car fixed or you buy a new one. However, we recommend getting comprehensive-only coverage for those damages from events like fires, floods, or theft. If you ever want to recover your car in any way, having comprehensive insurance is worth it.

Other Circumstances: Do You Need Insurance?

Maybe your car isn’t broken down but is in storage, is never driven, and/or has an outstanding loan. What do you do regarding your insurance policy in those situations?

  • Car is in storage: Even a parked car in storage should have some level of storage insurance, including comprehensive coverage to protect against fires, theft, and vandalism.
  • Car is never driven: The same principles apply, especially if your car is parked outside, where it could be damaged by things other than cars, like hail.
  • Car has an outstanding loan: Unfortunately, you’ll still have to pay the rest of your auto loan on your car, even if you never drive it. Whether or not you choose to refinance your auto loan or file for bankruptcy in worst-case scenarios, you should still have comprehensive coverage on your car at the very least. And if you drive your car, you must meet your state’s minimum requirements.

TIP

See what the states require for auto insurance requirements in our guide to auto insurance.

How to Lower Insurance Rates for a Broken-Down Car

Of course, no one wants to be paying an exorbitant insurance premium for a car that doesn’t run. You can keep your rates as low as possible by following these steps:

  1. Drop all but comprehensive coverage. If you’re not driving your car, you don’t have to worry about damaging someone else’s vehicle or property or causing bodily injuries to another person or people with it, otherwise known as liability coverage. And if you’re not driving it, you won’t need collision insurance, which could cover your car’s repairs in the event of an at-fault accident. You also won’t need uninsured motorist coverage if your car is parked safely, away from uninsured motorists. Rather, you can keep only your comprehensive coverage, which covers damages from incidents not involving other cars. Dropping full coverage insurance should lower your costs significantly.
  2. Use discounts. Every auto insurance provider offers discounts. Find out ways you can save, whether that’s for low annual mileage or for having continuous insurance with the same company. Ask your insurance agent for the discounts that apply to you.
  3. Shop around. If you’re not happy with your rates, discounts and all, don’t be afraid to compare quotes from different companies. Switching auto insurance could save you money. To learn more about how to switch auto insurance, read our auto insurance FAQs.

NOTE

If you own a broken-down car but think you will drive it eventually, get non-owners insurance, which is cheaper than regular car insurance but could cover property damages in at-fault accidents.

Recap

If you want to protect your broken-down car, having comprehensive coverage only is a cheap and easy way to do so. After all, if you ever want to salvage your vehicle, you’ll be happier not having to pay out of pocket for any damages from fires, floods, hail, or whatever life throws at you.

Citations

  1. Do you need insurance for a car in storage? Progressive. (2022).
    https://www.progressive.com/answers/insurance-car-in-storage/