If a court takes away your license for a driving offense, your driving ban will only last for a certain period, but you may wonder what you should do with your auto insurance during this ban. For example, in Texas, the authorities can suspend your license for up to two years if a court finds you guilty of DUI, which is quite a long period to consider. While some people may decide to sell a vehicle and not need insurance, other drivers will prefer to keep an insurance policy active on their car during a period of suspension. Learn more about how this type of auto insurance works and why people choose these policies.
How does non-operational coverage work?
Auto insurance doesn't just protect a vehicle during a collision. A comprehensive car insurance policy will protect your car from damage, loss or theft in other situations. As such, given the value of the asset, it makes sense to think about insurance for a car, even if you won't – or can't – drive it.
Insurance companies generally refer to this type of insurance as non-operational coverage. This type of insurance still conforms to various underwriting criteria, but the insurer only takes on the risk on the assumption that you won't drive the car anywhere. On this basis, it doesn't matter that you don't have a license or that the authorities have suspended your license.
Non-operational coverage may cost you more money than a standard policy, even though you can't legally drive the car. In some cases, insurance companies will consider a driver who wants this type of coverage as a higher risk than his or her counterparts, especially if he or she has lost a driver's license due to a criminal conviction like DUI. The underwriting criteria for non-operational coverage are generally the same as a conventional policy, so the make and model of the car are important, along with details such as the storage location for the vehicle.
What are the benefits of non-operational coverage?
Non-operational coverage has several benefits for drivers facing a suspension.
If you keep up your insurance policy even though you can't drive, you may still continue to get a better rate for your insurance later on, as long as you don't make a claim. For a driver with many years of accident-free driving, it may make more financial sense to keep a non-operational policy running than it would to terminate the coverage, especially if you know you will want to resume driving after the court lifts the suspension. You may also find it easier to get insurance if you have continuity of coverage.
Some people may assume that a home contents insurance policy would protect a car while it is off the road. This is generally not the case, and you'll nearly always need comprehensive non-operational coverage to protect your car in this situation. Where a home contents policy offers coverage, the insured limits are often too low to cover a car.
Of course, some valuable or collectible cars may appreciate over time. If you own a classic car and you want to continue to drive after your suspension, it's worth investing in non-operational coverage to protect such a collectible asset. Remember that non-operational coverage will protect you from theft, which will remain a risk even though you can't drive the car.
Where can you buy non-operational coverage?
If you're looking for this type of auto insurance, you may need to talk to a specialist insurance provider. Many insurers specialize in the type of risk they are willing to take on. For example, some companies will only insure low-risk drivers, and there are also companies that specialize in non-operational coverage. Of course, you'll probably need to shop around to get the policy you want at the best price.
You don't have to have a driver's license to get auto insurance, and you can often keep your coverage running during a period of suspension. Talk to an insurance broker from a company like Northeast Insurance Agency for more information or advice.