Do I Need Insurance For A Car In Storage?

Key Points:

• You need insurance for a car in storage if it’s registered with the DMV.
• Some insurance companies offer comprehensive-only plans and others offer discounts for storing a car.
• You can cancel your car insurance if you also suspend the registration.

Whether you’re storing your car because you’re not using it or if you’re just looking to preserve the vehicle, you should keep it insured to avoid lapse-of-coverage penalties down the line. But do you need to buy separate car storage insurance, or do you already have protection folded into your current policy?

This article will look at how car storage insurance works, when you need it, and when you can drop other parts of your insurance coverage while you’re not using your vehicle. Our team of experts has ranked and reviewed the best car insurance companies on the market, and we’ll give our recommendations for providers that may suit your vehicle while it’s out of commission.

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Is Car Storage Insurance A Type Of Coverage?

If you are putting a vehicle in storage or not driving for an extended period, there are several reasons it’s a good idea to maintain some level of car storage insurance. Your car could still be at risk for damage, and dropping coverage could make it harder and more expensive to get insurance later on.

However, when you look at an insurer’s website, you probably won’t see the term “car storage insurance.” Instead, you’ll want to look for a comprehensive coverage policy. This type of auto insurance protects your vehicle in most non-moving situations. It’s typically part of a full-coverage auto insurance policy and works differently than collision coverage or liability coverage, which also covers certain instances of vehicle damage.

Here are a few causes of damage usually covered by a comprehensive policy:

• Theft
• Vandalism
• Natural disasters like hail, floods, fires and tornados
• Falling objects like a tree branch hitting your car
• Animals such as hitting a deer or rodent damage to car wiring

These are some of the most common issues you may run into while your vehicle is in storage, which is why comprehensive coverage is a great option for car storage insurance. If you incur any covered damage, your insurance company will foot the bill up to the actual cash value (ACV) of your car, minus your deductible.

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Do I Need Insurance For A Car In Storage?

If you’re not going to be driving a vehicle for a long time and are planning to put it in storage, you should ask yourself: How much auto insurance do I need? Since you won’t be using the vehicle, check with your insurer about comprehensive-only coverage.

An insurance company may offer customers comprehensive-only coverage if they’re planning on storing a vehicle for 30 days or more. If an insurance agent can adjust the policy, you’ll be able to drop liability and collision coverage from your full-coverage policy. This will likely reduce your premiums significantly.

Drawbacks Of Dropping Coverage

Although it’s cheaper, dropping liability car insurance means there’s a pretty limited scope of things you can do with your vehicle. You legally won’t be allowed to park it on a public road, so you’ll have to keep it either in a garage, driveway, or storage unit.

Driving the car will also be out of the question, as you won’t be meeting the minimum insurance requirements in your state. That means that if you need to get your car out of storage, you’ll have to tow it or reinstate your liability insurance.

Some states may not allow car owners to drop liability coverage. In places that do, you’ll probably have to cancel your vehicle’s registration and turn in your license plate to the DMV.

When You Can’t Drop Coverage

Besides states that prohibit drivers from dropping liability insurance, there are other situations in which you won’t be able to reduce your coverage, such as if you’re leasing or financing the car.

Lienholders usually ask someone taking out an auto loan to purchase full-coverage auto insurance. Most states require drivers to purchase liability insurance, but this only covers damages to other drivers’ vehicles after an accident. A lender requires collision and comprehensive in addition to that.

These policies also ensure a lienholder can recoup the value of a vehicle if it’s a total loss. A lender will require you to maintain auto insurance coverage while there’s still a remaining balance on the car loan, whether it’s in storage or being used as your daily driver. So until you own the vehicle outright, you’ll have to carry car storage insurance that meets your lender’s demands.

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How To Properly Cancel Insurance When Storing A Car

If you’re storing a vehicle for many months and not driving it at all, you can drop insurance if you also suspend or remove your vehicle registration. Some states allow you to suspend registration for a time if the vehicle will be worked on for long-term repairs or stored away from public roadways. Others allow you to cancel the registration and re-register it later.

Contact your state’s DMV to see what your options are. You’ll have to move the car to the storage location before canceling the registration and then your insurance. Since registration is what makes the car legal to drive, you don’t need insurance if there is no registration.

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How Much Does Storage Insurance Cost For A Car?

The cost of a comprehensive car insurance policy isn’t set in stone. Insurance providers consider multiple factors when calculating rates, including:

• The driver’s age
• Make, model, and mileage of the vehicle
• Credit score
• Driving record
• Previous insurance claims
• Your level of coverage and deductible

Your location also plays an important factor when deciding insurance costs. Since states set minimum coverage requirements, which can include uninsured motorist coverage and personal injury protection depending on where you live, the price for insurance for someone living in New York will be different than for someone living in North Dakota.

Our rate data shows good drivers pay an average of $1,968 per year or $164 per month for full-coverage insurance. You might find lower rates if you can get comprehensive-only coverage from your company.

Car Storage Discounts

Some companies offer discounts for storing vehicles with coverage. For example, USAA offers 60 percent off while you store your car and Geico offers a 25 percent discount for an emergency military deployment.

Mileage-Based Insurance

Another thing to look for is a mileage-based insurance program like Allstate’s Milewise. These programs charge a base rate per month and a per-mile rate. Since you won’t be driving the car at all, you’ll basically pay nothing for the mileage charge.

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Why You Should Maintain Coverage On A Stored Vehicle

Some might think there’s a loophole for car storage insurance: dropping coverage entirely. After all, why should you insure a vehicle that’s not going anywhere, especially if it’s stored in a secure location? Well, going that route poses financial and legal risks.

Coverage Lapses

Insurance history is one of the first things an insurance agency will look at when giving you a quote. If there’s a lapse in coverage, a provider may charge a higher premium when you decide to restart coverage–or they may refuse to cover your vehicle altogether.

A lapse in coverage happens when you remove insurance from a registered vehicle. The insurance company notifies the DMV of the change. Since you don’t have a new company to take over, the DMV sees you as an uninsured driver.

Driving Without Insurance Is Illegal

If you’re pulled over without carrying your state’s minimum required coverage, you’ll probably be getting a ticket–or worse. Driving without car insurance coverage is illegal in about every state, and being fined for it is something an insurance provider will see. Plus, if you’re in an accident while uninsured, the cost of property and injury damages will be coming entirely out of your pocket.

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Do I Need Insurance For A Car In Storage: Our Take

To wrap up, some car insurance companies offer comprehensive-only policies that can help you save money while your car is in storage. You can also suspend your registration and then cancel insurance. But don’t simply cancel your coverage without talking with an agent or your state’s DMV.

Our Recommendations For Car Insurance

If you’re looking for insurance options while your vehicle stays off the road, take the time to see what level of comprehensive car storage insurance is offered by your current insurer. If it doesn’t meet your criteria, consider shopping around and getting free insurance quotes from different providers.

Geico: Best For Basic Coverage

We think Geico is the best option for basic coverage due to its competitive rates, solid insurance options, and multiple discount options. As the nation’s second-largest insurer, Geico has an A- rating from the Better Business Bureau (BBB), and many customers are satisfied with the company’s discount opportunities. Geico also offers up to 15 percent off for military members plus 25 percent off for deployment.

For more information, check out our Geico auto insurance review.

USAA: Best For Military Members

As we mentioned above, USAA has a huge 60 percent discount for storing your car. If you’re a military member or immediate family of someone with USAA, the company is definitely worth checking out. USAA frequently performs well in industry surveys from J.D. Power and it maintains an A++ financial strength rating from AM Best.

Learn more in our USAA insurance review.

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Do I Need Insurance For A Car In Storage: FAQ

Below are a few frequently asked questions about car storage insurance.

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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