Most states require every registered car to have insurance, so the answer is yes. You need car insurance on a car that doesn’t run. This means that you’ll either need to find cheap coverage or consider canceling your registration for a car that doesn’t run.
Canceling insurance coverage on a broken-down car can cause your license plate to become invalidated, making it harder to obtain auto insurance on any car in the future. Even worse, canceling your insurance before the registration will result in a gap in your insurance history that can lead to higher premiums later on.
How to Reduce Insurance Costs for a Broken-Down Car
Some insurance policies offer comprehensive insurance on vehicles that don’t run. This coverage is usually cheaper than standard insurance, and it will protect your car from theft or damage, such as from a fallen tree. However, if you get the car running again, you will not be able to drive it with just “comp” insurance. Rather, you will have to obtain your state’s minimum required insurance coverage in order to avoid breaking laws.
Some insurance companies allow drivers to suspend their insurance coverage for a period of time. This does not cancel your policy, but it does mean you will not be covered from any theft or damage that occurs while your policy is suspended.
You might consider purchasing storage insurance from your carrier. Storage coverage usually comes with conditions – ensuring your car is parked in a garage or storage unit, for example. Purchasing this policy will allow you to avoid lapses in your coverage. However, if you decide to repair the stored car, you will need to obtain your state’s required minimum insurance coverage before you can legally drive it again.
Paying insurance for a broken-down car might still be costly and not the best decision for your current budget. In that case, you might consider canceling that car’s registration. If you cancel the registration, you will no longer legally be required to carry insurance on that vehicle. Canceling the registration first will ensure that you follow all applicable laws and do not create a gap in your insurance coverage.
Canceling your insurance coverage entirely can be a costly decision. Typically, this would create a lapse in your insurance history, and obtaining coverage after you repair your broken down car or purchase a new car might cost more. If you decide to cancel your coverage, it is a good idea to first cancel the car’s registration, in order to avoid breaking the laws in your state, invalidating the license plate and creating a gap in your insurance history.
If you own only one car and that car stops running, your cheapest option might be to maintain some form of insurance coverage while you search for a new car or make repairs. As always, it is a good idea to check with several insurance providers in your area to better understand your options.
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