Car Insurance for Cars Not Being Driven
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UPDATED: Jul 14, 2021
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- Cars that aren’t being driven may still require the same level of insurance coverage than vehicles that are operated on a regular basis
- When your vehicle has an active registration, you still have to comply with the state’s insurance laws even when it’s just sitting in a storage facility or driveway
- If you turn in your license plates and file a planned non-operation permit with the DMV, you can legally end your coverage without having to worry about any penalties
- When you surrender your license plates, consider suspending your coverage instead of canceling the policy altogether. A suspended policy can easily be reactivated and keeps your insurance history going
- Most insurance companies will let you keep comprehensive coverage on a vehicle that’s not being operated so you can file a claim for the repairs needed after a fire, theft, or vandalism
There is a long list of reasons why you might own a car that you don’t drive. The car could be inoperable, unsafe to drive, or not registered and therefore it’s nothing more than a decoration in your driveway.
If you have a vehicle just sitting, you’re not alone. According to the US Department of Transportation, a majority of households with vehicles have more vehicles than drivers.
Just because you won’t be driving one of your cars for an extended period time doesn’t mean that you don’t need insurance. In fact, you might have to legally carry insurance depending on how the car is registered and whether or not the car is financed.
Here’s what you need to know so that you buy the right car insurance for your cars not being driven:
When do you legally have to keep insurance on a car that’s not driven?
When your car is sitting and the engine hasn’t been started in weeks or months, it’s not much of a risk. You don’t have to worry about your liabilities in the vehicle and injuring someone or damaging property.
Even though it’s not a risk, to the state, it’s your legal duty to insure it.
The state will only require vehicle owners to maintain their insurance and prove that their coverage has been continuous when you keep your vehicle registered.
If you haven’t found the time to go to the DMV to turn in your plates or you haven’t filled out the non-operational permit that’s on your registration renewal, you legally need car insurance on your car to avoid fines.
The type of insurance and the amount of insurance that you need to carry is dependent on the state that you live in. Auto insurance laws are dictated by state law and what the officials in the state believe drivers need to carry for public protection.
Even though the limits of liability that are required in each state will differ, most states require the same type of coverage. If you’re not familiar with the state-mandated requirements, here’s what you need to carry to avoid being penalized:
- Bodily Injury (BI) – pays for medical bills you’re liable for when third-party drivers are injured in a vehicle-related accident
- Property Damage (PD) – pays for body repair and mechanical repairs when you’re liable for damaging someone else’s vehicle, building, or other property
It might be frustrating to learn that you have to pay annual, semi-annual, or monthly premiums for coverage on a car that you have no intentions of driving, but the cost of the penalties will be higher than the cost of insurance.
If you don’t want to get stuck paying the premiums, you need to contact the DMV and find out what steps you need to take to surrender your plates. In most states, you only need to go to the DMV and turn in your plates.
You’ll be asked to fill out an application to file the car as a non-operational vehicle. Then, you’ll receive a paper that you should keep in the car showing the car is still in good standing with the DMV.
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What are the penalties for owning a car without auto insurance?
If you own a registered vehicle without auto insurance, you might have to answer to the state even when you’re not caught driving it. More and more states have electronic verification systems that will show the status of your insurance real time.
They will send you a notice in the mail to prove that your coverage is active and you must respond.
If your coverage has lapsed and you can’t prove that you had coverage, your registration will be suspended. You will be assessed fines and penalties before the registration can be reinstated. If you ever want to sell the car, it could pose issues for the buyer and affect your agreement.
Most insurance companies offer their customers the option to suspend their policies when they temporarily don’t need insurance. When you suspend your coverage, you don’t have any coverage but the policy number still exists.
You won’t owe premiums but you can easily activate the coverage by contacting your agent and having the car inspected. Some of the benefits of only suspending coverage include:
- No cancellation fee
- Easily restart coverage when you are ready to drive
- Keep your loyalty discount
- Keep an insurance history with no gaps
Why should you keep comprehensive coverage on your vehicle?
Suspending the policy is an option but another alternative is to remove everything off of the policy but comprehensive. Comprehensive pays for repairs or to replace the car if it’s damaged after perils like fire, theft, missiles, or flood.
Since this is the only real risk when your car is kept parked, it’s wise to carry the coverage for a minimal premium.
If you want car insurance on your car that’s not being driven, be sure to shop around to find the lowest premium. Once you turn in your plates, you can decide if you still want to pay for parked car insurance.
For easy premium comparisons, use a quote comparison tool on the world wide web. After you pull up instant quotes, you can find the best deal for the limited amount of coverage that you need.