If my car was repossessed, what should I do with my car insurance?

If your car is repossessed, it's important to notify your insurance company. Depending on your situation, you may need to cancel your car insurance or remove the repossessed car from the policy. It is important to keep in mind that some states require you to surrender your license plates before you can cancel the insurance. If the plates are with the vehicle, you may need to contact the bank to get them back or submit a lost or stolen plate form to your DMV before you can cancel or remove the car from your policy.

Will my car insurance cover damage from my car being towed?

Whether your insurance covers damage from towing depends on your policy. Theft, vandalism and weather damage can be covered by comprehensive coverage if you have it on your policy. If your vehicle experiences collision damage due to the fault of the towing company, your insurance company may cover the loss but will likely subrogate the claim to recover money from the towing company's insurer. However, if your policy is for liability-only, you will need to work directly with the towing company's insurer to receive payments for the damage.

How much does car insurance cost?

The cost of car insurance varies depending on a number of factors, including your location, your driving history and the type of car you drive. The average annual cost of car insurance in the U.S. is $2,314 for full coverage and $644 for minimum coverage, but your rate could be higher or lower.

Can someone else get my car out of impound?

In most situations, only the vehicle's registered owner can get the car out of impound. They must show the impound lot proof of insurance, proof of ownership and an acceptable photo ID. It can be a tricky situation for teen drivers or students away in college who are drivers on the insurance policy but not the owners of the vehicle. In this case, the parent usually needs to be present for the car to be released. Exceptions can be made when the owner is too sick or if the owner is deceased.

How much insurance do I need to get my car out of impound?

Your car insurance policy must meet the minimum coverage requirement of your state for your car to be let out of impound. This level of coverage varies per state but typically includes bodily injury and property damage. Depending on your state, you may also need uninsured and underinsured motorist liability (UM/UIM) coverage and personal injury protection (PIP). If you start your policy with just the basic coverage required, you may want to revisit your policy and consider increasing your limits for better financial protection.

How to get your car out of impound without insurance

Written by

Shannon Martin,

Edited by

Amelia Buckley,

Reviewed by

Thomas Brock, CFA, CPA,

Expert verified

Published on April 15, 2024 | 9 min read

Bankrate is always editorially independent. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our . Our is to ensure everything we publish is objective, accurate and trustworthy.

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Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.

Key takeaways

Your car can be impounded for a variety of reasons, including driving an unregistered or uninsured vehicle.
If your car is impounded due to lack of insurance, you will need to obtain insurance and pay all related fees to get it out of the impound lot.
In most situations, only the registered owner of the car has the authority to get the car out of the impound lot.

Having your car impounded and trying to retrieve it can be a difficult scenario for any motorist. No matter the reason for your vehicle being impounded, it’s crucial to grasp that there are specific steps you must adhere to, notably paying the towing and impound charges, in order to get your car back. You’ll usually need to provide proof of insurance to reclaim your car from impound, but what if you don’t have car insurance? That’s when things might become particularly challenging. So, let’s explore how you can successfully secure your vehicle from an impound yard, even when you’re not insured.

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What happens when your car is impounded?

When your car is impounded, it essentially means that your vehicle has been seized and taken to an impound lot by a police department or a government agency. This action is generally taken without prior notice, and law enforcement officials are not obligated to have a discussion with you about it. The length of time your car can be impounded varies widely based on the laws in your state. It could be as short as 48 hours or as long as an entire year. In some states, like California, there are laws that allow a 30-day hold on an impounded vehicle for certain situations.

When a vehicle is impounded, per day storage fees apply to every day the car is there. If you find out that your car has been impounded, try to get it out right away to avoid additional storage fees and the possibility of losing ownership of the vehicle. Many states have a time limit on how long a car can stay in the impound lot before the towing company is allowed to sell or scrap the car for parts.

Does getting your car impounded affect your insurance?

The act of having your car impounded does not directly affect your car insurance rates. However, if your car was impounded because of a lack of insurance, being unregistered or because of moving violations, this could potentially lead to higher premiums. Driving without insurance is considered “risky behavior” and is a rating factor insurance companies underwrite for.

If you are stopped due to speeding or a DUI, driving without insurance is usually an additional offense that causes more state fees and an additional surcharge to your car insurance. Maintaining an active insurance policy is a simple way to avoid these extra expenses.

Reasons why your car might be impounded

There are several reasons why your car might be impounded. Here are a few common scenarios:

Driving without a valid driver’s license: If you’re caught driving without a valid license, your car can be impounded.
Driving without active car insurance: Driving without insurance is a serious violation and can lead to your car being impounded in most states.
Unpaid parking tickets: Accumulation of unpaid parking tickets can lead to your car being towed and impounded.
Illegal parking: If you park your car illegally, it can be towed and impounded.
Unregistered car: In most states, your vehicle needs to be registered before it can be driven or parked on a public road. Note that having an expired registration is different and typically warrants a ticket, not impound.
Driving under the influence: Drivers who get pulled over for a DUI/DWI will usually get their car impounded whether they have active insurance or not. Getting your car out of impound after a DUI/DWI can be especially difficult because you may lose your driving privileges.

Can the police tow your car for not having insurance?

Yes, the police can tow your car for not having insurance in many states. If you are caught driving an uninsured vehicle, you may receive a citation to appear in court with proof of insurance and only need to pay a fine.

However, every state and situation is different. In many states, the police have access to license plate readers and can determine if you are driving uninsured before they even pull you over. While being stopped for speeding or reckless driving may increase the chance of having your uninsured vehicle impounded, it is common for a car to be impounded at an insurance check.

Can I get my car out of impound without car insurance?

The process of getting your car back from the impound lot can be challenging even when you do have insurance. First, you’ll need to reach out to the impound lot to clarify if your car has to stay there for a specific time and what the release prerequisites are. Then, you’ll need to compile your ID and ownership proof documents like the car title and registration. Finally, you’ll need to secure funds to cover all the impound fees, towing costs and any other related expenses and bring them to the impound lot along with your proof of insurance. If you don’t have an active policy, you will need to secure one before your vehicle will be released in most states.

Can I get car insurance while my car is impounded?

Yes, it’s possible to take out insurance on a car that’s currently impounded. If your car is stuck in an impound lot without insurance, you may need to secure coverage before being permitted to retrieve it. Many insurance companies conveniently offer the option to search for and buy a policy online within minutes, which could be immensely beneficial if you’re pressed to show proof of insurance to the impound lot urgently.

How to get insurance for an impounded car

In order to get your vehicle back, you must show current car insurance proof. This is a rule for all vehicles registered in the U.S. (except New Hampshire) that are being used on public roads. Let’s break down what this process may look like:

Contact your prior carrier and ask if they are able to reinstate your auto policy without a lapse. In a situation where a policy is canceled for nonpayment and it has only been a day or two, there is a chance they will continue the policy without a lapse which would allow you to potentially have your ticket and impound fees waived.
If you can not have your policy reinstated, ask if you can have your policy started immediately so you can pick your car up that day.
Not all carriers offer same day coverage or have a 24/7 sales department. You may need to switch car insurance companies if you are dealing with this situation after hours. If you are not able to secure coverage with your prior carrier, check online for a company that offers same-day coverage and can either email or fax an ID card to you right away.
Keep in mind that you will need to have enough funds available to pay for your car insurance policy and the fees associated with the impound to get your car back.

Frequently asked questions

- If your car is repossessed, it’s important to notify your insurance company. Depending on your situation, you may need to cancel your car insurance or remove the repossessed car from the policy. It is important to keep in mind that some states require you to surrender your license plates before you can cancel the insurance. If the plates are with the vehicle, you may need to contact the bank to get them back or submit a lost or stolen plate form to your DMV before you can cancel or remove the car from your policy.
- Whether your insurance covers damage from towing depends on your policy. Theft, vandalism and weather damage can be covered by comprehensive coverage if you have it on your policy. If your vehicle experiences collision damage due to the fault of the towing company, your insurance company may cover the loss but will likely subrogate the claim to recover money from the towing company’s insurer. However, if your policy is for liability-only, you will need to work directly with the towing company’s insurer to receive payments for the damage.
- The cost of car insurance varies depending on a number of factors, including your location, your driving history and the type of car you drive. The average annual cost of car insurance in the U.S. is $2,314 for full coverage and $644 for minimum coverage, but your rate could be higher or lower.
- In most situations, only the vehicle’s registered owner can get the car out of impound. They must show the impound lot proof of insurance, proof of ownership and an acceptable photo ID. It can be a tricky situation for teen drivers or students away in college who are drivers on the insurance policy but not the owners of the vehicle. In this case, the parent usually needs to be present for the car to be released. Exceptions can be made when the owner is too sick or if the owner is deceased.
- Your car insurance policy must meet the minimum coverage requirement of your state for your car to be let out of impound. This level of coverage varies per state but typically includes bodily injury and property damage. Depending on your state, you may also need uninsured and underinsured motorist liability (UM/UIM) coverage and personal injury protection (PIP). If you start your policy with just the basic coverage required, you may want to revisit your policy and consider increasing your limits for better financial protection.