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Vehicle Storage Insurance, Explained
Let’s say you put your convertible in storage during the winter months when you use your other car because it handles the weather better. Or maybe you’re re-building the engine on a classic car and you know it’ll be sitting in your garage for months while you work. Do you really need to keep your insurance on these cars when they’re off the road for a considerable amount of time?
It might be easy to cancel your insurance, but it may not be the best choice for you. Let’s take a look at the factors involved in vehicle storage insurance.
What is vehicle storage insurance?
Actually, there isn’t a type of insurance called “vehicle storage insurance”. When people talk about insurance for stored cars, or “parked car insurance”, what they usually mean is that they will cancel liability and collision, and any additional endorsements they have on their policy, and just keep comprehensive coverage.
Comprehensive is the part of your policy that protects your car from non-accident-related mishaps, such as:
- Damage by animals
- Fire damage
- Falling objects, such as a tree or large hailstones
The reason for this is that you shouldn’t need protection from an accident if your car is kept in storage, but that doesn’t mean it couldn’t be damaged in other ways. Those other ways are generally covered by comprehensive insurance.
One of the best reasons for doing this is to save money. Having a simple vehicle storage policy on your stored car will be considerably cheaper than a policy that includes liability and other coverages such as MedPay or uninsured motorist coverage.
How does car insurance storage work?
Storage insurance for cars assumes that your car is never driven and isn’t parked on a public road — which would be illegal in many states without liability insurance. So the first thing that you need to take care of is getting your car off the road and in a safe place for the duration of the storage period. A locked garage is one good option.
You’ll also need to cancel registration and hand in your license plates—check with your local DMV to see if there are any other requirements for having your car in storage.
Next, talk to your insurance agent. Your insurer may not write you a specific policy for the stored car if you don’t also have another policy with them that includes liability on another car. If you do, they are more likely to write you a policy, if your state allows it, for comprehensive-only coverage.
Most insurers require that your car be in storage for at least 30 days to qualify for stored car insurance, and many require you to have another policy with the company. If your state or your insurer have other requirements, you can find out from your agent what they are.
What does vehicle storage insurance cover?
Vehicle storage insurance covers anything that can happen to your car when you’re not driving it. These things range from natural disasters like hurricanes to fire and smoke damage. Even if your car is stored in a secured location, there are still a number of mishaps that can happen to it.
The good news is that you can get the coverage you need — a comprehensive only policy — for much less than the cost of a regular car insurance policy. You may pay anywhere from 50-80% less for the coverage you need for your stored vehicle. In fact, it may pay to make a few phone calls to a variety of insurers to see who gives you the cheapest prices for your stored car insurance.
Who should get vehicle storage insurance?
If you’re going to have a car off the road and in storage, you should consider vehicle storage insurance. There are a couple of reasons why you don’t want to just cancel your policy on the car altogether.
- First, if you have a gap in your insurance coverage, you may be placed in a high-risk category by insurers. They like to see that you’ve had coverage for the entire time you’ve been driving and may penalize you with higher premiums if you don’t.
- If the car is leased, or you still owe money on your car loan, your lender may require you to have insurance of some kind as long as the loan or lease is active.
- Leaving your car with no insurance at all puts you at risk of having to pay out of your own pocket if something happens to the car while it’s stored—which, as we’ve seen, is not impossible.
In short, anyone who has a car that they’re not using, whether it’s in storage because it’s not currently working properly, it’s a classic car just for show, because you’re going south for the winter or any other reason, should have a comprehensive-only vehicle storage policy.
Do I need to follow the state’s minimum coverage when getting vehicle storage insurance?
State minimum insurance requirements are largely related to liability coverage — that is, coverage that protects the other driver and his or her car in an accident that is your fault. Some states also require you to have uninsured/underinsured motorist coverage, in case you hit someone who can’t pay out for repairs.
But that’s not what you need when you have a stored car, since you won’t be driving it. It is legal to not have liability on your car as long as that car is not parked on a public road or driven — and if you also cancel your registration and turn in your license plates. So if you are definitely storing your car, and don’t intend to drive it a single time in the near future, you can cancel your liability coverage when you cancel your registration and plates.
It makes sense to check with your state’s local DMV office to see if there are additional requirements where you live. Most states have a specific procedure for the temporary surrender of license plates — note that there may be a small fee involved. In New York, for example, you may surrender your plates for a season and cancel your liability insurance, but there will be a charge of $25 when you pick up new plates later on.