Yes, keys can still allow the car to run but the remote may be dead.

The security chip in the key (which allows the car to start/run) is totally seperate from the remote unlock/lock in the key.

Sounds like the remote section in the key is intermittant - maybe a broken pcb track or something in the fob. Keys get dropped a lot and this can damage delicate circuitry.

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Wayne
2005 BMW X5 3.0d (b 02/05)
2001 BMW F650GS Dakar (b 06/01)