Do I Need to Maintain Auto Insurance on a Broken Down Vehicle?

Last Updated on October 17, 2020

Every vehicle eventually reaches the point at which it no longer operates.  Whether your vehicle won’t start, has a compromised engine, an altered alignment, or another issue, you will have to decide whether to continue insuring it.  The details of the automobile and your unique situation will shape your decision.

Do you need insurance on a car that doesn’t run? Can you cancel your car insurance if your car is broken down? Today, we’re answering every question you might have regarding maintaining insurance on a broken down vehicle.

Why It Makes Sense to Insure a Broken Down Vehicle

Do I Need Insurance on a Broken Down CarIf your car breaks down and doesn’t start, steer, or otherwise function as it should, do not assume you can simply remove insurance without repercussion.   Most states require vehicles to be insured even if they are not driven. If you live in a state with mandatory auto insurance, you must carry the legal minimum insurance level on your vehicle even if it does not run.

The bottom line is if the vehicle is registered in a state that mandates auto insurance and the registration is active, the vehicle must be insured.  Cancel your auto insurance policy and you just might invalidate the vehicle’s license plates, making it challenging to regain auto insurance. It will also be necessary to re-register the vehicle.  This process chews up your time, proves frustrating, and ultimately costs money you could use elsewhere.

Why It Does Not Make Sense to Insure a Broken Down Vehicle

If you do not plan on using your broken down vehicle in the near future, it makes more sense to cancel the registration than continue paying auto insurance.  After all, a car that doesn’t run won’t provide any utility so there is no sense in insuring it until it is back up and running. When in doubt, be sure to check the specifics of the law in your state as well as the nuances of insurance provider requirements and coverages.  Certain insurance providers permit a temporary reduction in the insurance cost if the vehicle is not operational.

The Merits of Comprehensive-Only Auto Insurance

Some auto insurers permit broken down vehicles to carry only comprehensive coverage to protect the vehicle until it returns to the road.  Comprehensive-only coverage is sensible for vehicles that cannot be driven as it still protects them against threats ranging from vandalism to fire, weather damage, and theft.  Get a quote for comprehensive-only coverage and you will be pleasantly surprised with how low it is. This form of insurance is cheaper than traditional full auto insurance, making it perfect for vehicles that need extensive repairs yet are still worth good money.

Just be sure to read the fine print of comprehensive-only auto insurance policy proposals before making a commitment.  Certain auto insurers mandate the vehicle owner to store the automobile in a protected and certified facility. Some auto insurers will refuse to issue the policy unless the vehicle is in storage for a minimum of six months.  However, even if you obtain comprehensive-only insurance coverage for your vehicle, it is not legal to drive it. Vehicles require more than comprehensive insurance to be taken onto the road. Minimum liability coverage is also necessary as comprehensive only insurance does not provide protection for collisions or liability.

Auto Insurance is Necessary to Register the Vehicle

If you allow your auto insurance to lapse, the car’s registration automatically becomes invalid even on a vehicle that is not operational.  If the registration is invalid, you are no longer legally permitted to operate it. Every vehicle must be insured to be registered. You will likely have to keep at least some insurance on your broken down vehicle even if it has not been on the road for months.

If you do not plan on driving the vehicle for a while, give serious consideration to removing full insurance including coverage such as collision insurance.  If you are not worried about natural disasters, theft, or vandalism, you should also give some consideration to dropping the broken down vehicle’s comprehensive coverage to boot.

What About Non-Functional Vehicles With an Outstanding Loan?

If your vehicle no longer runs and there is an outstanding car loan, the loan holder might require you to maintain full coverage on the vehicle regardless of the circumstances.  Though this stance is unfair, the lender must protect its financial interest through mandated auto insurance. Even though the vehicle is not on the road, it can still be hit by another vehicle, stolen, or damaged during a storm.

Final Word – Do I Need Insurance on a Broken Down Car?

It is clear there are a couple of different options for insuring (or not insuring) a vehicle that is broken down and no longer runs.  You have nothing to lose by speaking with a representative from your auto insurance company to determine which options are available.  Explain your unique situation to the insurance representative and you just might be surprised with the response. Your auto insurance provider will likely offer valuable insight into which insurance strategy is best for your unique situation.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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