Car Insurance for a Car Not Being Driven

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Key takeaways...

When you have an extra car that means that you’re left paying extra insurance premiums. For drivers who like to commute in one car and drive around town in the other, paying the extra premiums isn’t such a big deal.

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.

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:

Auto Insurance is Mandatory Regardless of How Much Your Car is Driven

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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.

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.

Determine If You Can Reduce the Coverage While It’s Parked

You may legally have to insure a vehicle but you don’t have to carry high levels of insurance.

When the car isn’t being operated, there’s no liability risk because you can’t crash into property or injure someone in it. This is when it makes complete sense for you to reduce your liability limits to the state minimums to save money.

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 have full coverage on a financed car?

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.

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

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.

Ask if you can suspend your insurance and see if this is an endorsement the carrier offers.

There’s no stipulation that says that you have to be driving a car for insurance to be mandatory. If you need to keep insurance on the car to avoid penalties, you should shop around to find the best rate.

To find the best rate, use our quoting tool online to get instant quotes.

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