If you stop driving your car for six or twelve months, is there any advantage in maintaining minimal coverage, such as collision insurance?
I plan to walk and bus for the next six-twelve months, leaving my 12-year-old Toyota garaged. My supposedly independent insurance agent says I should maintain minimal coverage [collision at about $15 per six-months] so there will be no gap in my coverage, which he says insurance companies frown upon.
Since I won’t need any insurance at all, this seems dubious. What’s wrong with telling my insurance company that since I won’t be driving, I won’t need insurance? And that when/if I resume driving, I’ll buy insurance again?
If it’s relevant: I live on USA west coast; have had no accidents, no claims, no moving violations, in over twenty years.
One thing that may bite you is that at least some jurisdictions are going to demand that you have insurance on your car in order to keep it legally registered, so you are potentially looking at not being allowed to leave it parked on a public street and possibly needing to have it stored in a warehouse or something, then when you want to drive it, not only will you need to re-apply for insurance, you will need to re-register the vehicle at the DMV.
When you return to driving and buy insurance again, it will likely be more expensive if you haven’t been continuously insured before that date. If your hiatus is long enough, you might save more than you pay, but that will depend on your insurance company and the coverage you want.
For a time as short as 6-12 months, probably better to maintain insurance, especially since you will still have the car. Collision insurance is the opposite of “minimal” coverage though- what you want is state minimum limits, liability only. That covers you if you hit somebody else, at whatever the state minimum amounts are, and will be the cheapest available. Collision & Comprehensive are add-ons that protect you losing the car in the case of crash, or theft/natural distaster, etc in the case of comprehensive. They generally aren’t required.
In Ohio, if you have plates on your car and don’t have insurance, you can lose your license. And, they do random checks asking you to prove you have insurance. Keep some minimum insurance.
If I can add a rider on to this question (since it may affect me soon). Does the situation change if you are getting rid of your car entirely for the duration? I.e. is it worthwhile to have insurance even if you have no car at all for the duration, not even “sitting in your garage doing nothing”?
A couple of things:
If your car is financed, they will require minimum comprehensive/collision insurance to protect their collatoral. If you own it, you can choose to not have coverage to protect the car. My stepson got an old beater and did not get collision insurance on it since in the long run it is more expensive than the car is worth, especially with a high deductable. Do I need to mention that he totaled it within a month?
The minimal coverage states require is liability insurance which means you crash into someone else, you’re covered by insurance. Check your state’s rules if the car or the driver is covered by liability insurance viz. if you are driving someone else’s car do you need to be insured.
Call your insurance company and tell them you won’t be driving it and ask them to drop liability, uninsured motorist, collision etc. Keep only comprehensive, theft etc.
I have done this for years with two cars (antiques) one runs, the other doesn’t. Both are insured - but usually with minimal insurance. When I do drive the one that runs, I simply call the agent and ask them to activate full coverage and they send me a bill. I believe I can start and stop this on a monthly basis if needed.
If I were in your position, I would drop the coverage on the vehicle to the minimum allowed by your state law and keep it registered. If you have a lapse in coverage, you will likely have to pay much more than you are currently paying when you try to reinstate it, and you will certainly have to turn in your license plate. You might not drive the car at all during the time you are planning, but you may have something come up where you need to drive it.
I think the insurance you are thinking about keeping is comprehensive, not collision. There is little chance your car would be involved in a collision, but some chance it would be stolen or it would be destroyed in a fire, which comprehensive covers.
I’m in this situation now. I sold one car before taking this assignment, but didn’t have time to get rid of the SUV, too, so it’s in the garage. It has storage insurance. It was under a hundred bucks for 12 months. When I was home in December (when I still had the previous policy), the Secretary of State gave me a temp tag for 1/10 of the annual rate. All I’ll have to do when I want to get in on the street is let the insurance company know, pay a pittance, and go back to the SecState. (I might not even do that; the risk is small to just take it around the block a few times.)
A side benefit is that by being continually insured, I won’t be subject to newbie rates when I finish my assignment and need real insurance again.
This depends on the state, and also on how long you’ve had insurance. In California, the insurance company can give you a discount for being their customer continuously, but not for being continuously insured.
You could just change your registration to a non-op, but it would need to be at least a year for it to be worth it.