Insuring a Car You Don’t Drive Often: A Comprehensive Guide

Insuring a Car You Don’t Drive Often: A Comprehensive Guide

For many car owners, a vehicle is an essential part of daily life, used for commuting, running errands, and everything in between. However, there are also those who own cars that are rarely driven. Whether it’s a classic car, a seasonal vehicle, or simply a second car that sits idle most of the time, insuring a car you don’t drive often presents a unique set of considerations.

The good news is that you have options. You don’t necessarily need to pay the same premiums as someone who drives daily. This comprehensive guide explores the various strategies and insurance products available to help you save money while ensuring your vehicle remains protected.

Understanding the Challenges

Before diving into solutions, it’s essential to understand why insuring a rarely driven car can be tricky:

• Risk Perception: Insurance companies base premiums on risk. The more a car is driven, the higher the potential for accidents, and therefore, the higher the premium. Conversely, a car that sits in a garage most of the time poses a lower risk. However, insurance companies still need to account for potential risks like theft, vandalism, or damage from natural disasters.
• Minimum Coverage Requirements: In most jurisdictions, some level of car insurance is legally required, even if the vehicle is rarely driven. This usually includes liability coverage, which protects you if you cause an accident that injures someone or damages their property.
• Gaps in Coverage: Canceling your insurance policy entirely might seem like a way to save money, but it can leave you vulnerable. If something happens to your car while it’s uninsured (e.g., a tree falls on it), you’ll be responsible for all the costs. Additionally, a lapse in coverage can sometimes lead to higher premiums in the future.

Strategies for Insuring a Rarely Driven Car

Here are several strategies to consider when insuring a car you don’t drive often:

1. Usage-Based Insurance (UBI): Pay-Per-Mile Insurance

   UBI programs, also known as pay-per-mile insurance, are ideal for drivers who clock very few miles. These programs use telematics devices (either a plug-in device or a mobile app) to track your mileage. Your premium is then calculated based on the number of miles you drive each month, plus a base rate.

   • How it Works: The telematics device records your mileage, and that information is transmitted to the insurance company. Some UBI programs also monitor driving habits, such as hard braking or speeding, which can affect your premium.
   • Pros:
     • Significant savings for low-mileage drivers.
     • Transparency: You only pay for what you use.
     • Potential for safe driving discounts.
   • Cons:
     • Privacy concerns about data tracking.
     • Premiums can increase if you drive more than expected.
     • Not available in all areas or from all insurance companies.

2. Reduced Coverage Options

   If you’re not ready for UBI, consider adjusting your coverage limits. Reducing certain coverages can lower your premium, but it’s essential to understand the trade-offs.

   • Liability Coverage: While you generally can’t eliminate liability coverage entirely (due to legal requirements), you might be able to reduce the limits. For example, if your state requires $50,000 in bodily injury liability coverage, you could opt for that minimum instead of a higher amount like $100,000 or $250,000. However, be aware that lower limits mean you’ll be responsible for a larger share of costs if you cause a serious accident.
   • Collision Coverage: Collision coverage pays for damage to your car if you hit another vehicle or object, regardless of who is at fault. If your car is older and its value has depreciated significantly, you might consider dropping collision coverage altogether. The potential savings might outweigh the cost of repairing or replacing the car out-of-pocket.
   • Comprehensive Coverage: Comprehensive coverage protects your car from damage caused by events other than collisions, such as theft, vandalism, fire, or natural disasters. If you store your car in a secure garage and live in an area with low crime rates, you might consider reducing or eliminating comprehensive coverage. However, weigh this decision carefully, as comprehensive coverage can be valuable in unexpected situations.

3. Storage Insurance (Comprehensive-Only Coverage)

   Some insurance companies offer a specialized type of coverage for cars in storage. This typically includes comprehensive coverage only, protecting against theft, vandalism, fire, and other non-collision damages. It excludes collision coverage, as the car is not being driven.

   • Pros:
     • Lower premiums than full coverage.
     • Protection against common storage-related risks.
   • Cons:
     • Not suitable if you plan to drive the car at all.
     • May have restrictions on where the car can be stored.

4. Classic Car Insurance

   If your rarely driven car is a classic or antique vehicle, consider a classic car insurance policy. These policies are designed specifically for vintage vehicles and often offer lower premiums than standard car insurance.

   • Eligibility Requirements: To qualify for classic car insurance, your car typically needs to meet certain criteria, such as:
     • Age: Usually at least 20-25 years old.
     • Condition: Well-maintained and in good condition.
     • Usage: Primarily used for shows, club events, or occasional pleasure drives.
   • Pros:
     • Lower premiums than standard car insurance.
     • Agreed value coverage: Pays out the agreed-upon value of the car in the event of a total loss.
     • Specialized coverage options, such as coverage for spare parts.
   • Cons:
     • Restrictions on usage: May not be allowed for daily commuting.
     • Mileage limitations: Often have annual mileage limits.

5. Temporarily Suspend Coverage (If Allowed)

   In some cases, you might be able to temporarily suspend your car insurance coverage if you won’t be driving the car for an extended period (e.g., during the winter months). However, this option is not available in all states or from all insurance companies.

   • Important Considerations:
     • Check with your insurance company to see if they allow temporary suspension.
     • Understand the terms and conditions of the suspension.
     • Ensure the car is stored safely and securely during the suspension period.
     • Be aware that you won’t be covered for any damages that occur while the policy is suspended.

6. Shop Around and Compare Quotes

   Regardless of which strategy you choose, it’s always a good idea to shop around and compare quotes from multiple insurance companies. Different insurers have different underwriting criteria and pricing models, so you might find significant variations in premiums.

   • Tips for Comparison Shopping:
     • Get quotes from at least three different insurance companies.
     • Provide accurate information about your car and driving habits.
     • Compare coverage options and limits carefully.
     • Ask about discounts for low mileage, safe driving, or other factors.

7. Increase Your Deductible

   A deductible is the amount you pay out-of-pocket before your insurance coverage kicks in. Increasing your deductible can lower your premium, but it also means you’ll have to pay more if you file a claim.

   • Considerations:
     • Choose a deductible that you can comfortably afford to pay in the event of an accident.
     • Weigh the potential savings in premium against the increased out-of-pocket cost.

Conclusion

Insuring a car you don’t drive often requires careful consideration and a proactive approach. By understanding the available options and weighing the pros and cons of each, you can find a solution that balances affordability with adequate protection. Whether you opt for usage-based insurance, reduced coverage, or another strategy, remember to shop around, compare quotes, and choose a policy that meets your specific needs and circumstances. Always prioritize having some form of coverage to protect yourself from financial losses in case of unexpected events.