Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Aug 6, 2021

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Key takeaways...

  • You must buy car insurance on any vehicle that you own as long as it’s registered through the state
  • Car insurance is mandatory almost everywhere and you need to comply with the laws to avoid penalties
  • If your car isn’t going to be driven, don’t automatically cancel your insurance or you could pay the price
  • You need to keep at least the minimum liability insurance on your cars that are parked if they still have valid tags
  • While not all states require valid insurance to register your vehicle, stopping coverage altogether could cause more problems than you may realize. If you want to remove coverage from the car, you need to surrender your plates and file the car as a non-operative

We understand, for the drivers who have an extra car that’s not being driven, it feels like a waste of money to pay premiums for coverage on a car you’re not using. If you use it occasionally, it may make sense to hold minimum limits. But what about cars with a dead battery, those that you don’t drive for long periods of time, etc.? Whether you’re planning on selling your car, repairing it at some point, or if you can’t drive right now, the rules are the same.

No matter how pointless it may seem, removing insurance from your car that’s not being driven could lead to an endless road of issues if you don’t take the right steps.

Don’t pay more than you have to for the coverage you need. Enter your zip code above to compare car insurance companies side-by-side.

You can either keep a minimal amount of coverage on the vehicle or you can complete a transaction with the DMV to change your registration. Here’s what you should know to avoid problems:

How Much Coverage Do You Need for A Car That Isn’t in Use?

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While it may seem silly if you’re not driving a car, you still need to carry minimum liability limits. This is based on your state. Some states also require personal injury protection for medical bills. This covers you should something happen that would cause injuries associated with your car.

Even if you plan to park your car for a long period of time, you may also want to buy comprehensive coverage. Especially if you keep it on private land, you’re probably not worried about your car getting into an accident with another vehicle. Even while parked, your car could suffer serious damage during a windstorm or with heavy hail or flooding. Depending on where you live, your car could also be damaged by wildlife or through vandalism. A good comprehensive coverage policy would protect you against all these circumstances.

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Why Do You Need Liability Coverage on A Car That’s Not Being Driven?

Auto insurance is mandatory regardless of how much your car is driven. Auto insurance isn’t something that you can avoid.  As soon as you buy a car and you register that car in your name, you’re the liable party for anything that happens in the car or any damage the car causes while being operated.Even if your car is not being operated and the parking brakes go out, you’d be liable for any damage it does while rolling downhill. Similarly, if there were an issue with a fire caused by your inactive car, you would also be liable.

Unfortunately, being liable for damages doesn’t always mean you’ll be able to pay for the damages that you cause.

Since cars weigh more than two tons and they travel at high speeds, they are capable of causing major damages, injuries, or even death. This is why most state officials have deemed it necessary to draft mandatory auto insurance laws.

You have to be in compliance with the law when you own a car. The law says that you’ll have to have insurance on a car that’s registered. If your car isn’t being driven, that doesn’t mean that it’s not registered.

When the plates are active and the registration is on file with the DMV, you must have a minimum amount of insurance.

Can You Lower Your Coverage Levels If You Don’t Drive Your Car?

You may legally have to insure a vehicle but you don’t have to carry high levels of insurance. Even if you drive on a regular basis, you’re only required to meet state minimums to cover your liability and possibly some medical bills depending on where you live.

If you’re  not driving at all, it makes complete sense for you to reduce your liability limits to the state minimums to save money. If you want to add comprehensive coverage for a parked vehicle, you might be surprised at how reasonable the pricing is. Insurance companies may want some assurance you’re checking the tire pressure, taking preventative measures in cold weather, etc. But their risk is minimal.

Most of the time, it’s not recommended to do this because it will leave you vulnerable, but as long as you’re not driving the car, it’s okay to reduce the limits.

If your car isn’t being financed and it doesn’t hold value, you can also remove physical damage coverage from it and save even more money without being penalized in the future.

If you’re financing your car and it’s going to stay parked for the season or while you’re on vacation, you have to keep more than just liability coverage on it. In addition to what’s required by law, you’ll have to keep comprehensive and collision on the vehicle.

You may be able to raise your deductibles to lower your premiums, but you have to have full coverage.

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What Happens If You Don’t Carry Enough Auto Insurance Coverage?

If you remove full coverage from the car or you let your insurance contract end, your finance company will penalize you by adding a charge for lender-placed insurance on your loan.

Not only does this raise your payment, it extends your loan and increases the interest charges. That’s a huge price to pay for a car you’re already not driving. Unfortunately, you don’t get extra coverage based on the penalties you face.

The penalties and consequences for failing to purchase liability insurance are a lot more serious.

The state can impose monetary penalties and even some criminal penalties when you’re guilty of owning or driving an uninsured vehicle.

Here’s why you want to be sure you don’t remove coverage from your car even if it’s in storage:

  • The state can suspend your registration
  • You will be charged a fee to reinstate your registration
  • State officials can tow and impound your vehicle if it’s not insured
  • Parking authorities can cite you for parking an uninsured vehicle on public property and you must pay the fees
  • If you remove coverage and you have to drive the car, you could be stopped, ticketed, and even arrested for being uninsured

Even if you own your car outright, cancelling your insurance could have significant effects on your future costs. Insurance companies look at how long you’ve been with your current insurer when you’re getting quotes. Whether you’re being insured for the first time or if you let your insurance lapse, clients who apply for a new plan without a current one pay more for the same insurance.

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What happens if you turn in your plates?

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If you don’t want to be stuck insuring a car that you’re not going to drive, there is a solution. The solution would be to surrender your plates to the DMV so that you’re not required to comply with the insurance laws.

Since you’ve turned in your plates, you’re not allowed to drive the car. This eliminates the risk and therefore the mandatory insurance requirement.

If you turn in your plates and file the car as a non-operational vehicle, you don’t need liability insurance but you may want to keep comprehensive. Many carriers will let you keep your comprehensive insurance on the car while it’s parked. Keep in mind, if you cancel your insurance altogether, you’ll still be penalized when you want to sign up again with higher rates. Insurance companies don’t give exceptions because you were not legally required to carry insurance.

If you’re ready to shop for auto insurance, use our quoting tool online to get instant quotes. You can start with your zip code and answer a few questions to get quotes in minutes from several providers. Then you can compare coverages and pricing to see what makes sense for you.