Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • If your car is unregistered, you may tow the vehicle to get it to your new destination
  • Insurance protects a towed vehicle with liability insurance because coverage is only required when operating a car on public roads
  • If a loss occurs due to collision with another vehicle or property, you will need to file two separate legal claims
  • If the car being towed is damaged, the physical damage coverage is on the main vehicle’s insurance only
  • There are numerous penalties for failing to insure a registered vehicle

Except for New Hampshire, it’s illegal to operate a vehicle without insurance anywhere in the U.S. There are punitive measures taken against drivers without insurance. Law enforcement officers often impound uninsured vehicles.

Don’t get caught driving without insurance. Use our free comparison tool today to find the best rate on car insurance.

Uninsured motorists have increased over the years, if one is caught driving without coverage, the car may be impounded by a police officer on patrol. Ensure that you understand the relevant insurance laws.

Vehicle Towing

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  • You may be pulled over if you lack insurance coverage.
  • The authorities utilize number plate detector devices to alert an officer of non-insured vehicles.
  • Currently, officers may tow uninsured vehicles or charge you with a penalty for violation of the applicable laws.
  • If the officer tags you with a DWI, your car will, unfortunately, be towed off.

States such as New York do not compromise on car insurance enforcement. Citizens driving without car insurance have their vehicles towed immediately.

Several states demand drivers to carry their insurance card/certificate whenever they drive a car.

Failure to provide evidence of insurance when called upon may result in confiscation of your car, whether you have legal insurance or not.

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Facts You Need to Know About Car Towing

  • If your car is unregistered, you may tow the vehicle to get it to your new destination. Since the car isn’t licensed to operate on public roads, you may skip the insurance cost by having the car uninsured.
  • As long a car is not driven and not licensed with the Department of Motor Vehicles, forfeiting car insurance is perfectly legal.
  • If the vehicle is on the move without insurance coverage, that’s illegal.
  • A vehicle does not necessarily require protection when it is in transit. The contentious issue here is whether it is moving on its power or not.
  • While a car is in tow, the rules regarding insurance differ from those of a driven vehicle.
  • Traffic rules may reduce the need for state minimum car insurance, but there are situations where insurance is compulsory.

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How Insurance Protects a Towed Vehicle

Liability insurance is necessary and is the only coverage required when operating a car on public roads.

Liability insurance entails bodily injury and property damage which pays for lost income, third-party medical bills, and repair bills in the event of an accident leading to injury or damage.

Towed vehicles need to attach current liability insurance to the vehicle in question.

The insurance is designed to protect the covered vehicles found on the insurance policy declaration’s sheet; it may extend coverage to other vehicles when you tow a car behind your insured car.

Scenarios Where You Might File a Liability Claim

If a covered vehicle is towing another uninsured vehicle, the front driver will be protected in particular circumstances. Towing a motor vehicle is risky and requires experience and skill. If you collide with other vehicles, you may be liable for lengthy insurance claims.

Luckily, liability limits extend to both the trailer and the towed vehicle on the trailer. Review your liability limits to get extra protection. The limits coverage apply to a single incident and will not be upgraded based on the transportation needs you bear.

If a loss occurs due to collision with another vehicle or property, you will be required file two separate legal claims.

One claim for the liability filed against the leading car’s insurance policy. If the car being towed is damaged, the physical damage coverage on the primary vehicle’s insurance will not extend to the towed vehicle.

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How to Insure a Towed Vehicle for Damages

Towed vehicles should have Insurance coverage. Without an Insurance policy, the vehicle owner is liable for all the repair and damage costs on the car, with no help from the tow company or insurance.

Buy the right insurance for towing a car that includes liability and damage coverage, and also includes damage by collision and comprehensive losses.

Several states do not require a towed vehicle to have insurance. Towed vehicles have temporary coverage from the towing company, but once the car is detached the coverage drops.

Before you request a cancellation, note that the liability insurance may be a requirement for compliance with some state insurance laws.

If your towed car is registered within a state, you must maintain the least liability insurance to comply with the state laws.

Penalties for failing to insure a registered vehicle include:

  • License plates suspension
  • Fines for parking an uninsured car
  • Vehicle confiscation
  • Suspension of driver license
  • Vehicle reinstatement fees

Consequences with Your Bank

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If your vehicle is under premium financing, the payments have to be done even when you cannot drive the car. Canceling your insurance can lead to overstated interest rate charges and infringement of your agreement with your bank.

The bank may force-place insurance to protect their interests and not yours.

If you don’t have insurance altogether, stay away from driving until you fix the situation. It is risky (depending on your state) to tow a vehicle with no coverage.

Critically consider all the available conditions before deciding on the next cause of action. Use our free comparison tool to get started finding the insurance you need today.