My Car Broke Down, Do I still Need Car Insurance?

Working on a Broken Down Car
••• Getty Images/Daly and Newton

If your car breaks down and you are on a high-deductible insurance policy or have taken the option to self-insure your vehicle in a state that allows you to do so, the price of repairs could be very costly. For those on a tight budget, you may need to wait a few months before you are able to actually make the repairs.

Lots of people are having a tough time making ends meet. A major car repair can cripple some families, forcing harsh decisions on what cuts to make. Car insurance is expensive, leaving many people wondering if they need to pay for car insurance while a car is broken down.

If it’s going to be a while before you are driving your car, is it a good idea to cancel your car insurance policy?

Circumstances can vary greatly, and so can the answer to the question. But in most cases, it’s not a great idea.

Multiple Car Family

If multiple cars are insured on the same policy and one breaks down, the answer is no, you do not necessarily need to insure the car needing repairs while it is not being used. If absolutely no one will be driving the car, it does not need to be insured. However, if your current policy protects the vehicle in the event of a flood, fire, theft or other non-driving damage, then canceling your insurance policy could be a risky move.

One Car Family

If your only vehicle is down and out, you will need to maintain car insurance in one form or another. Decide how to stay insured based on how long it will take to repair or replace your car. You might be able to reduce the amount of coverage you take until the time that you’re ready to drive it on the road once again.

What If You Have An Outstanding Car Loan?

In most cases, if you have a loan on your vehicle, your lender may require full coverage no matter what the circumstances are. While it may seem unfair, financial institutions want to protect their investment, and a car that’s not being used could still fall prey to storm damage, being hit by another driver, or be stolen. Though lenders are sometimes able to obtain third-party car insurance on the vehicle and send you the bill, it is much cheaper both long and short-term to maintain your own policy.

Alternative Coverage Options

Comprehensive or storage insurance may be a possibility if your car needs repairs, so long as you have an alternate vehicle being driven on the car insurance policy.

Comprehensive coverage will continue to protect the vehicle against physical damage while it is not in use. Fire, theft, vandalism, and storm damage would all be covered. It is important to remember, having a vehicle with comprehensive only coverage means it is not legal to drive on the road. Liability coverage is required to drive the vehicle.

Ways to Reduce Car Insurance Costs

In a pinch, you could try to get added as a driver to a relative or friend's car insurance while yours is canceled, or ask them to purchase a named Non-Owner car insurance policy.

But although it may sound counterintuitive, it is usually the cheapest to maintain car insurance on the vehicle needing to be repaired. Canceling your car insurance can be very costly. A good rule of thumb is to never let your car insurance lapse. It may seem useless to pay car insurance on a vehicle you cannot drive; however, it is the cheaper route to go since you will be considered high risk the next time you need insurance.