Living Car Free - Insuring a non-existent car?

Does anybody keep an insurance policy after they go car free? How much does it cost?

If I were to come into a situation in the future where I needed to get a car again, I have heard that my insurance will be very high if I have dropped my policy. Any comments or experience with this problem?

1) You can insure yourself instead of a car. That will be very expensive.

2) If you acquire insurance after being uninsured, your insurance rate will be higher initially.

I've never priced it out but I would suspect that the savings from not having insurance at all for several years would outweigh the cost of either carrying a non-owners policy or any surcharge you would incur upon reacquiring insurance again.

P.S., If you go car-free make sure you understand what insurance coverage you have if you, on occasion, still drive a vehicle.

I am getting close to the point of simply taking the plunge. I need to do the math, but I don't need the car at all any more. And the long term looks like it will stay this way. I have moved to SF; I have always had family here and I love it. But it seems like a bad deal that I can drive wonderfully for 20 years and if I go without a car for two years and then get another car later I have to pay insurance like I was a 16 year old again.

You can probably look for a really cheap/old car, and have them insure that at the max coverage for liability/uninsured motorist driving less than 10k miles per year and nothing else like collision, maybe even a classic reg. I've only driven for mayb six years, and the insurance on my old truck is less than $40 a month w/o collision, so with 20 years of experience, it should be much less for you, maybe even under $20. Keep the car in a garage/behind a fence and disable to ignition, or you could even remove the VIN where ever it is and scrap it, although I'm not sure if that's legal. Not to say it's illegal either, just a grey area.

But it seems like a bad deal that I can drive wonderfully for 20 years and if I go without a car for two years and then get another car later I have to pay insurance like I was a 16 year old again.

Is it really that bad??? Call your insurance agent/company and have them price it out. I'd think that any surcharge wouldn't be too bad and would quickly disappear after a couple of years.

Our local car sharing organization monthly charge of $14 is the cost of your ongoing insurance. [http://www.peoplescar.org/pages/rates.html].

Alternatively, if you have family or friends who could add you as a secondary or occasional driver to their policy, it might work out. I seem to recall that as a new driver on my parents' policy, the incremental cost for insuring me was ~$50 per year (that was a long time ago now...).

Ask yourself why you would let any insurance company hold you
hostage by making you pay for nothing just because you "might"
need insurance in the future??

Insurance companies use many rotten tricks just to keep you
hooked into always paying them. This is just one of them.

For myself.......NO car,NO pay.

You should switch to Geico. ;)

Drop the insurance. Don't pay for something you're not using.

It can't be that bad. I know someone who didn't have insurance for three years because their license was suspended for DUI. She only pays $700 more a year than I do with a perfect record. There is no way it makes financial sense to keep insurance on a car that you don't have.

I lapsed for 10 days on a late payment one time (I never received the bill). Geico and progressive wanted to charge me a significant surcharge - almost double what it was. I shopped around and that State Farm would insure me for less than the old payments.
I had your same concern when I dropped the car, but figure that I can find someone w/ a low rate when the time comes.

If I were to come into a situation in the future where I needed to get a car again, I have heard that my insurance will be very high if I have dropped my policy.

Someone I know dropped their insurance for a couple years, then picked it up again. They said big hike only lasted for the first six months.

I am not an insurance agent though, you should call around before you decide what to do.

I lapsed for 10 days on a late payment one time (I never received the bill). Geico and progressive wanted to charge me a significant surcharge - almost double what it was. I shopped around and that State Farm would insure me for less than the old payments.
I had your same concern when I dropped the car, but figure that I can find someone w/ a low rate when the time comes.

Well a lapse is quite a different thing than simply not having a car insurance policy because there is no underlying need. But I whole heartedly agree with the rest of what you say. Insurers are pretty free to pick the factors they will base their rate upon so shopping around is always called for.

I went to one of the online sites and ran a scenario for the OP. Guessing that it is a he, 37 years old, San Francisco, driving a 2003 Honda Accord I got the following:

For currently insured: your 6 month policy rate is $630.20
For not currently insured: your 6 month policy rate is $800.20

So if the OP goes car-free for 6 months he saves $630.20. If he then re-obtains insurance for the next 6 months he suffers a surcharge of $170.00.

Next question is how long would such a surcharge last. That I can't answer but would think, on the outside 5 years but maybe a little as 6 months as someone else offered. Lets take the middle ground and say 3 years before the company rates him equally again. Assuming the surcharge doesn't decrease at all doing that time period (probably not a realistic assumption). That comes to $1020 in extra surcharge payments. So if the OP is car free for just 1 year then:
$1260.40 (insurance saved) > $1020.00 (possible surcharge eventually incurred)

Is it really that bad??? Call your insurance agent/company and have them price it out. I'd think that any surcharge wouldn't be too bad and would quickly disappear after a couple of years.I don't think it would take that long. But this is good advice to keep yourself covered in case of accident while you're riding:


You can probably look for a really cheap/old car, and have them insure that at the max coverage for liability/uninsured motorist driving less than 10k miles per year and nothing else like collision, maybe even a classic reg....

This is all good food for thought. I knew I needed to get down in the details by talking to my insurer, but I have also gotten some new ideas that had not occured to me (minimum insurance on a car that I am not really using, or getting on a family member policy as a part time driver.) Mostly though I am still leaning towards just losing the car and not looking back - it sounds like there will be some flexibility in my options IF I need to get a car again further down the road.

I lapsed for 10 days on a late payment one time (I never received the bill). Geico and progressive wanted to charge me a significant surcharge - almost double what it was. I shopped around and that State Farm would insure me for less than the old payments.
I had your same concern when I dropped the car, but figure that I can find someone w/ a low rate when the time comes.

10 days late on a payment will not cause your insurance to be dropped. In fact it is illegal to drop you unless they have sent you a letter after 30 days of no payments. At that point they can drop you and back date it, but you cannot be dropped after only 10 days and no notice.

Someone I know dropped their insurance for a couple years, then picked it up again. They said big hike only lasted for the first six months.

I am not an insurance agent though, you should call around before you decide what to do.

While this advice means well it also serves to point out another dirty trick insurance companies
use to hold their customers in bondage. That is the the fear of being punished for stopping paying
them every month. ANY surcharge is an insurance companies way of punishing you for either
costing them money with a claim or when you drop them. ALL insurance companies are in business
for profit not protect the customer no matter what the sales pitch is or how big the agent smiles.

As to the agent....
There is not an agent on the planet that will tell you the truth about what's in YOUR best interest
when it comes to dropping a policy. THAT is their living so why would they advise to stop paying
them??

When it comes to insurance companies I play take no prisoners hard ball. NONE of them are my
friend.

Just stay carfree and you'll never have to deal with the insurance bastards again.

While this advice means well it also serves to point out another dirty trick insurance companies
use to hold their customers in bondage. That is the the fear of being punished for stopping paying
them every month. ANY surcharge is an insurance companies way of punishing you for either
costing them money with a claim or when you drop them. ALL insurance companies are in business
for profit not protect the customer no matter what the sales pitch is or how big the agent smiles.

As to the agent....
There is not an agent on the planet that will tell you the truth about what's in YOUR best interest
when it comes to dropping a policy. THAT is their living so why would they advise to stop paying
them??

When it comes to insurance companies I play take no prisoners hard ball. NONE of them are my
friend.

It's basically semantics, but technically you cannot be charged for not having insurance if you do not own a vehicle or regularly operate a non-owned auto. The issue comes into statistics; insurance companies, so long as their rates are filed with the state, have statistics showing that you are more likely to be involved in an accident if you have been uninsured for a period greater than 30 days, even if you were not REQUIRED to carry insurance. That factor is built into most companies' rates. So techically someone in this position is not being surcharged; their intial rating factor is higher.

Lapse of licensing is a different issue.

There are several companies that will not surcharge you for lack of prior insurance if there was no NEED for prior insurance. Shop and you will find them.

Lapsing for 10 days is quite a serious offense in terms of the indication of future claim cost....and totally distinct from lack of prior insurance.

If you fail to find a carrier that doesn't surcharge you (or place you in a higer rated tier/company) then in 6 months, shop again. This time you DO have prior insurance. Just don't let there be a lapse between the expiration of your current policy and the new policy.

-P&C Actuary

There are several companies that will not surcharge you for lack of prior insurance if there was no NEED for prior insurance. Shop and you will find them.
...
If you fail to find a carrier that doesn't surcharge you (or place you in a higer rated tier/company) then in 6 months, shop again. This time you DO have prior insurance. Just don't let there be a lapse between the expiration of your current policy and the new policy.

Cool - thanks. I am getting more confident about this.

You could buy and insure an old scooter. It costs me $40 a year to insure my 1985 Honda Aero 50. I got it out of a dumpster, but they can be had for < $200.

If you decide to go with the "old car in the garage" route, and insure the car for occasional use, consider getting an older car whose make/model is known for reliability. If you're doing the car-free route for environmental reasons, think about getting a diesel vehicle and running it on bio-diesel when you do need to drive.

If you do insure a junker, be sure to specify that you drive it for "recreation" only (not commuting), and estimate a low yearly mileage. My monthly bill dropped 30 percent when I did this. For State Farm, I believe the cutoff is something like 1500 miles a year.

before you totally drop your insurance, make sure that you aren't losing out on insurance that will pay for your healthcare if you're injured on your bike. i'm not sure how it all works so i don't know if it's worthwhile or not, but i know that in some cases cyclists have used their auto insurance in this way. something to ask about, at least!

Two years ago, I went carfree, dropped the insurance, and after 8 months, I got a car again. When I re-entered the car cult and got a new policy, I didn't end up paying a higher rate at all. I don't know what you guys are talking about, having to pay more... I did use the same agent that handled my other insurance policies (homeowners, boat, etc.), so maybe that had something to do with it.

(By the way, I'm carfree again, and much happier. I agree with an earlier post, if you're carfree for life, insurance is not an issue.)

related to car insurance,
i'm wondering about license plate renewals. In Canada there is a $78 fee to renew your license plate each year on the day of the owners birthday. My father owns this car but lives in mexico. The only ones living in the house (myself and my two siblings) are car free and dont use the car ever. Do i keep updating my dad's license plate till he comes back to use the car occasionally (4 months every two years)? or can i just wait till right before he comes back and process the renewal a week or so before hand? (this is Ontario Canada, i dont know these things work elsewhere but it might be similar.)

the rates you paid when you were 16 were primarily rooted in the fact that you had no driving experience, not that you didnt have insurance. Drop the insurance, but keep your DL.

10 days late on a payment will not cause your insurance to be dropped. In fact it is illegal to drop you unless they have sent you a letter after 30 days of no payments. At that point they can drop you and back date it, but you cannot be dropped after only 10 days and no notice.

Better bursh up on your Jersey Law....

NJ requires renewal forms be sent to policy holder 30 days prior to payment due date. A reminder/warning of cancelation must be sent 15 days prior to due date. The insuruer is neither required to provide further notice, nor is he required to renew your policy if it lapses. No Grace.