Car Insurance for a Vehicle You Don’t Drive

Auto Insurance, Insurance
How to Save on Car Insurance When You're Away From Home

No one wants to pay for things they won’t need, and that includes car insurance. You might be thinking about how to ditch your auto policy if you own a car you don’t drive — like a convertible in winter storage or a broken-down beater sprouting rust in the garage.

Putting your car insurance on hold can be a good way to save money if you have an out-of-use vehicle. But it’s not as easy as halting your Netflix subscription. In addition, your options may be limited depending on why you’re taking a hiatus from driving the vehicle or whether you have a car loan.

There are four main options to explore:

Suspending your coverage

ProsCons
  • You won’t pay for insurance while your car is out of use

  • You likely won't have a coverage lapse, something that could increase your future rates
  • The vehicle won't be covered if anyone wants to drive it

  • The vehicle won’t have insurance against nondriving problems like fire, animal damage, vandalism or theft

  • Drivers with car loans typically are ineligible

Suspending coverage essentially pauses your policy but doesn’t cancel it. That way, you can probably prevent your hiatus from being called an insurance lapse, which would result in higher rates later. Confirm this with your insurer beforehand.

Companies don’t always let customers suspend coverage, or might allow it only in certain situations. Geico lets military members suspend coverage when they store their cars for at least 30 days, for example.

Also, contact your department of motor vehicles to see what steps it requires for insurance suspension. You may need to file an “affidavit of non-use” to halt state-required auto coverage. This document officially lets the state know that you won’t operate your vehicle for a given time.

Suspending your policy probably isn’t an option if you have a car loan. Lenders generally require that you maintain coverage for problems such as theft and vandalism.

Canceling your policy

ProsCons
  • You won’t pay for insurance while your car is out of use

  • You can cancel your car insurance regardless of your insurer
  • The vehicle won't be covered if anyone wants to drive it

  • The vehicle won’t have insurance against nondriving problems like fire, animal damage, vandalism or theft

  • You'll have a coverage lapse, which could increase your future rates

  • Drivers with car loans typically are ineligible

You could consider canceling your auto coverage and getting a new policy when you’re ready to drive the car again. However, like suspension, cancellation probably won’t work if you have a car loan. Your lender likely will want at least some insurance on the vehicle.

Contact your DMV if you’re thinking about canceling. It may require you to submit an affidavit of non-use to officially take the car off the road and drop state-required insurance.

The biggest downside to canceling is that it creates a lapse in your insurance history. Continuously insured customers generally get better rates than drivers who have coverage gaps, with some exceptions. For instance, Esurance lets deployed military members cancel and reinstate their policies without dinging them for a coverage lapse.

Reducing your coverage

ProsCons
  • You won’t pay for unneeded insurance while your car is out of use

  • You won't have a coverage lapse, something that could increase your future rates

  • If you keep comprehensive, your car will be covered for nondriving problems like fire, animal damage, vandalism and theft
  • The vehicle might not be usable if anyone wants to drive, depending on how much you scale back coverage

  • You'll have to pay for the insurance you keep

  • You'll likely have to keep certain coverages if you have car loan

Cutting back coverage on stored cars is a good alternative if you’re not eligible for suspension and don’t want to cancel your policy.

“We’ll work with any customer to remove unnecessary coverages to lower their premium while away for an extended period of time,” Esurance spokeswoman Dolleen Cross says.

To start, you can reduce your auto insurance to the coverage required by your state. Almost every state requires liability insurance, and others mandate uninsured/underinsured motorist coverage, personal injury protection and/or medical payments coverage.

Consider keeping comprehensive insurance, or adding this option, in case your vehicle suffers damage while stored. Comprehensive pays to replace your car if it’s stolen, and it covers a bunch of nondriving problems such as vandalism and damage from falling objects.

Ordinarily, you must buy comprehensive along with collision coverage. But your insurer may make an exception and let you keep a comprehensive-only policy if you’re storing your car long term. If you have a car loan, your lender may require you to keep both comprehensive and collision coverage.

If your insurer allows you to keep comprehensive and drop everything else, including liability insurance, contact your DMV. You may need to file an affidavit of non-use because your car would no longer have enough insurance for anyone to drive it legally.

Removing yourself from the policy

ProsCons
  • The vehicle will be covered for nondriving issues like fire, animal damage, vandalism and theft

  • The vehicle will still have the insurance needed to drive it legally
  • You likely won't have a coverage lapse, something that could increase your future rates
  • You'll have to pay for insurance while you're away

  • You'll have to add yourself back on the policy once you’re home for at least 30 days

Instead of changing your coverage, ask your insurer if you can remove yourself from the car insurance policy temporarily. This option is worth exploring if you’re going away — on a military deployment, for instance — but others will be driving the car.

This option can save you money if you’re a riskier driver than the others on your policy, because taking yourself off reduces the odds of a crash, in your insurer’s view, Cross says.

If it won’t save you money, there’s little benefit to removing yourself, and it’s probably more convenient to stay on the policy.

Removing yourself from the policy is not the same as being an “excluded” driver. If you’re simply not listed on the policy, you can still drive the car if you come back for a visit of fewer than 30 days, according to Esurance. If you’re excluded, you aren’t supposed to drive the car and won’t have any insurance if you do.

There’s no single insurance option that works best for everyone who’s taking a break from driving. If you’re not sold on any of the above choices, remember that maintaining coverage on out-of-use vehicles isn’t all bad. Keeping a stellar payment history and avoiding coverage lapses should help you get competitive rates down the road.

To shop around for rates, try NerdWallet’s car insurance comparison tool.

Updated April 24, 2017