If you have only two drivers in your household, you may question the need for insuring a third vehicle that rarely gets used.
Most states require you to carry liability insurance on each car you drive, regardless of how often the vehicles are on the road. Generally, registered cars require insurance.
What's the big deal about not insuring a car that rarely is used? The answer is simple, says Jim Klapthor, a spokesperson for Allstate Insurance Co.. Liability insurance covers damage your cars might cause to others or their property. These days, the cost of repairs and medical expenses can add up quickly.
Accidents happen close to home
You may not drive your third car often or for great distances, but that doesn’t mean it won’t be in an accident, adds Peter Moraga, a spokesperson for the Insurance Information Network of California. "Studies repeatedly show that most car accidents occur close to home," he says.
If your third car is sitting in the driveway or parked on the street, it still could be involved in a mishap. A tree could fall over during a storm and dent its roof. Your parked car could be broadsided by someone speeding down your street who then disappears.
If either of these things happened, you'd likely want comprehensive and collision insurance to help pay for the cost of repairing or replacing the vehicle, Klapthor says. Comprehensive coverage pays for damage resulting from things other than car accidents. Collision pays to repair your own vehicle following an accident.
Here's another scenario that explains why you need insurance for all your cars: One of the vehicles you drive is in the repair shop. You then use a car you rarely drive and accidentally run a red light. When a police officer stops you, he or she asks for proof that the car is insured, Klapthor says. If it isn't, you’ve got trouble.
Multicar discounts help lower premiums
If you don't drive a car often, it probably won't cost you that much extra to insure it, Klapthor adds. Most car insurance companies offer multicar discounts and base their rates on a number of factors, including how many miles you drive each car annually.
The only time you might not have to insure your extra car is if it isn't operable. Check with your state department of motor vehicles.
Ways to save on car insurance
If you own multiple cars, take steps to minimize your car insurance premiums, advises Amy Bach, executive director of the United Policyholders consumer group in San Francisco. She recommends that you:
- Shop for the best rates. Get insurance quotes from different insurance companies. Be sure you're comparing the costs of similar coverage plans; a deal isn’t a deal if it doesn’t provide adequate coverage.
- Make sure you're getting all the discounts to which you’re entitled. Often, car insurance companies offer a discount for insuring both your home and your vehicles with the insurer.
- Carry a higher deductible on the oldest car and consider dropping comprehensive and collision coverage if one or more cars are older than five years. If a car is not worth the cost of repairing or you’re willing to live with a few dings and dents, you may not need the extra coverage.