Do I Still Need Insurance for a Car That Doesn't Run?

Car mechanic using computer in auto repair shop
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Repairs can be very costly if your car breaks down and you're covered by a policy with a high deductible, or if you're self-insured in a state that allows that. You may need to wait a few months before you can afford to make the repairs if you're on a tight budget. Major car repair can be financially crippling, and car insurance costs a lot.

You may wonder if you can drop your insurance for a while, saving the money so you can put it toward repairs instead. But it’s not a great idea to cancel your insurance in most cases, even on a car that no longer runs.

Multiple-Car Families

You can cancel your insurance on one car if you have more than one auto and they're are all insured on the same policy. You do not have to insure the car that needs repairs if it breaks down, as long as it is not being used. You may be able to drop coverage on just this auto if no one at all is driving the broken car.

But canceling would be a risky move if your current policy protects the vehicle in the event of a flood, fire, theft, or other non-driving damage. You could end up paying for these repairs, too, as well as the other work the car needs to run.

State law requires that any registered vehicle must be insured in some states.

One-Car Families

You will have to maintain car insurance in one form or another if you have just one car and that auto is down and out. Decide how to stay insured based on how long it will take to repair or replace your car. You might be able to at least reduce the amount of coverage you take until you’re ready to drive it on the road again.

What if You Have an Outstanding Car Loan?

Your lender will want you to have full coverage if you have a loan on your car, even if the car won't run. It may seem unfair, but lenders want to protect their investments—that money they gave you to buy the car that you haven't completely paid off yet. A car that’s not being used could still fall prey to storm damage, get hit, or be stolen.

Lenders may be able to obtain third-party car insurance on the vehicle, then send you the bill. It is often much cheaper, both long- and short-term, to just maintain your policy.

Other Coverage Options

Changing your insurance to comprehensive-only or "comp-only" coverage, or to storage insurance, may be your answer if your car isn't drivable because it needs repairs. This might also work if you have an alternate auto that's being driven on the same car policy. You can carry just comp-only coverage on this car rather than cancel all coverage on it.

You will often have to insure a car up to your state's legal coverage limits. This includes carrying liability coverage in all states but New Hampshire. Dropping this coverage would be okay on a second car if your first was fully insured so you can meet your state's legal rules.


Insurers may insure the car comp-only in some cases, but only for a limited time or under strict locked storage rules.

Dropping liability coverage means your car can't legally be driven on public roads. But comp coverage will at least continue to protect the auto against physical damage while it is stored and not in use. Fire, theft, vandalism, and storm damage would all be covered.

Ways to Reduce Your Car Insurance Costs

You can look into a couple of options if keeping your current insurance is just too costly. You could try to be added as a driver to a relative's or friend's car insurance while yours is canceled and you're driving their auto instead of your own. Or you could purchase a named non-owner car policy. This is a plan with no auto attached to it. It covers only bodily injury and property damage done to other cars.

It's often cheapest to maintain car insurance on an auto that needs to be repaired. Canceling your plan could end up being very costly in the long run. A good rule of thumb is to never let your car insurance lapse. A gap in coverage will get you tagged as a high risk driver the next time you need and apply for insurance.

It may seem silly to pay for car insurance on an auto you can't drive. But it is often the least costly answer.