Jessica Sautter is a Content Writer for 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: Sep 21, 2020

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Here's what you need to know...

  • Liability insurance is extremely important and often the only type of coverage that you are required to carry
  • Your liability policy will pay when you or a permissive driver are operating a covered vehicle
  • Without insurance on the car, you will be left to pay for all of the repairs bills

If your vehicle is inoperable or unregistered, you may choose to tow the car to get it to the shop or perhaps to your new residence.

Since the car is not licensed to be operated on public roadways, you may choose to skip the expense by keeping the car uninsured.

As long a car is not being driven and is not licensed with the Department of Motor Vehicles to be driven on public roadways, choosing not to insure the car is perfectly legal.

It is when the vehicle is attached to another with the intentions of moving it from one location to another that the topic of insurance gets to be a bit confusing.

While the rules of the road may eliminate the need for state minimum car insurance, there are still scenarios where insurance is mandatory.

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Will you be protected in the event of a liability loss?

Liability insurance is extremely important and often the only type of coverage that you are required to carry when you own a vehicle and operate it on public highways.

When you buy liability coverage, it consists of both Bodily Injury and Property Damage which will pay for third-party medical bills, lost income, and repair bills that you have been found to be responsible for.

As long as the towed vehicle is attached to the covered vehicle that has active liability insurance the damages are covered.

Typically, your liability insurance will pay when you or a permissive driver are operating a covered vehicle and get into a collision that leads to damage or injury.

While the insurance is designed to protect the covered autos that can be found on the policy declaration’s page, it will also extend to other vehicles.

One of the ways that your coverage will extend is when you are towing a car behind your covered auto.

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Scenarios Where You Might File a Liability Claim

If a covered vehicle is towing another vehicle that happens to be uninsured, the lead driver will still be protected in specific scenarios.

Towing a vehicle can be dangerous and does require experience and skill. It is not out of the ordinary to veer into another lane, brake late, or collide with another vehicle if you have a car in tow.

If you do wind up colliding with one or more third-party vehicles, you will have a claim to deal with.

Luckily, the trailer and the car on the trailer that is being pulled by the lead car will receive the same liability limits that the lead car has.

Since there is more exposure to a loss when you are towing cars or trailers, it is very important that you review your liability limits and consider raising them to get added protection.

The limits you carry apply to a single incident and will not be bumped up because you are transporting a trailer or a vehicle.

Will the vehicle be covered for repairs if it is damaged?

If you have a loss where you collide with another vehicle or object, chances are you will need to file two separate claims.

You will file a liability claim, which will be filed against the lead car’s policy.

Unfortunately, if the car that is being towed is damaged, the physical damage coverage on the lead car’s insurance will not also extend to vehicles in tow.

How to cover a vehicle in tow for damage?

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If you are worried about your vehicle being damaged while it is being towed, you should have coverage on the car.

Without insurance on the car, you will be left to pay for all of the repairs bills without any help from an insurance company or a tow company.

It is crucial that you have the right insurance for towing a car before you go on your local or cross-country trip.

If you are looking for an alternative to the standard car insurance plan that includes liability and damage coverage, buying a specialty car towing plan is a good idea.

Be sure that the plan includes damage sustained by comprehensive and collision losses.

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Considerations to Remember Before you Cancel your Insurance

Just because many states do not require a towed vehicle to have its own insurance does not mean it is time to rush to call to request a cancellation.

Towed vehicles may temporarily have coverage from the car that is doing the towing, but once the car is disconnected the coverage is gone.

There still may be a need for liability insurance that complies with state insurance or financial responsibility laws.

Criminal Consequences


If you are the owner of the car and the car is registered within the state, you must maintain the minimum amount of liability insurance to comply.

Failing to do this can land you in hot water.

Some of the penalties for failing to insure a vehicle that is registered include:

  • Suspension of license plates
  • Fines and fees for parking an uninsured vehicle
  • Vehicle impoundment
  • Citations and fines if the vehicle is driven
  • Suspension of driver license
  • Reinstatement fees

Consequences with Your Lender

If your vehicle is still being financed, you need to fulfill your obligations, even when the car you are paying finance charges for cannot be driven.

It might sound like a good idea to save money by canceling your insurance, this can lead to inflated interest charges and violations of your contract with your borrower.

The borrower can force-place insurance, which will only protect the lender and not your own interests.

As you can see, there is not just one simple answer when you ask whether or not you can insure a vehicle with no insurance.

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