Should I keep car insurance on a car I am not driving?

One of the common questions we get is when somebody buys a new vehicle and has their old vehicle and can’t decide what they’re going to do with it.  Whether they want to keep it as an extra vehicle or sell it, so the question we receive is: should I keep it on my insurance policy or should I take it off?

Obviously, it will save you money in the short term by lowering your monthly insurance premium, however, there are some other things that you need to consider:

For example, in almost every single state in the US, a registered vehicle must carry a minimum amount of insurance if it’s registered in that state. So, if you’re truly taking a break from the car in question, you will want to cancel your registration in addition to locking up the vehicle in secured storage of some type before you cancel the insurance on that vehicle. We suggest that you check with the local DMV to see what your legal requirements are because every state is different.

Some insurance companies have what some people call a “storage only” policy, the technical term is the comprehensive only policy. Comprehensive coverage protects the vehicle from fire, theft, vandalism, weather damage, Etc., in other words, the kind of damage that would happen to your vehicle outside of your control and from not driving. Some companies will allow you to convert your Auto to a comprehensive only if you have other primary driver vehicles.

Keep in mind comprehensive policies do not cover any damage that happens to the vehicle while it’s being driven nor does it provide any liability should you take it out on the road for a quick spin. Another issue arises when people store their vehicles and then they forget to call and turn the liability coverage back on when they want to drive it, take it to the car dealership to just sell it, or when they want to let a prospective buyer drive the vehicle. Obviously, this is a MAJOR Gap in coverage just because you forgot and wanted to save a few dollars a month. So, if you choose to go comprehensive only on your vehicle, make sure you set yourself a reminder to notify the insurance company before you take it out on the road.

In most cases the vehicles in question are much older vehicles and don’t carry much value so removing them from the policy at the end of the day really isn’t going to save you that much money. Our suggestion is you decide what you want to do with the vehicle first before you consider reducing coverage so you can plan accordingly.

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