When your car is tucked away in storage, whether for the winter months, during an extended vacation, or for any other reason, a common question arises: “Do I need car storage insurance?” You have a few different options and we’re going to discuss them in this article so you can make an informed decision.
Understanding the basics
First, you need to understand what your standard car insurance policy covers. Typically, it includes liability coverage (which is mandatory in most states) and optional comprehensive and collision coverage.
When your car is in storage, you don’t have any risks of car accidents on the road. By removing coverage for accidents (collision coverage), you can save significant money on your car insurance.
Insurance options for cars in storage
There really isn’t a special policy for a car in storage. However, some insurance companies will allow you to adjust your coverage to better accommodate for the car not being driven on the road. You may be able to remove liability and collision and keep comprehensive coverage only. This can be a cost-effective way to protect your vehicle during its storage period.
If you haven’t stored your car yet and are looking for locations, options and a storage size estimator, ExtraSpace Storage has some great resources.
If you’re still going to take the vehicle out every once in a while on nice days, this may not be a good option for you. You’ll have to get ahold of your agent and add liability and collision, receive pro-rated billing and then remember to take the coverage back off. At that point, your billing will be adjusted and pro-rated again. It can create a bit of a billing mess.
To be completely honest, many insurance agents don’t like this. It’s kind of like gaming the system and with so many changes you run the risk of adding or deleting coverage for the wrong date and having an uncovered claim.
Risks to consider
Risks while your car is in storage (depending on if it’s in enclosed, covered or open storage) can include:
- Theft
- Vandalism
- Fire
- Damage from weather and natural disasters such as wind, hail, lightning, floods and earthquakes
Comprehensive coverage, often known as “other than collision” coverage, protects your vehicle against these risks. Without this coverage, any damage or loss occurring while the car is in storage would be an out-of-pocket expense.
Removing all coverage
Of course you could remove all coverage if you decide that financially it doesn’t make sense to even insure the car with comprehensive coverage only. Sometimes people do this if the vehicle is worth a very small amount of money.
CAUTION:
If this is your only vehicle, you’ll have to completely cancel your policy. If you cancel your policy, your insurance record will show you had a lapse in car insurance. If that happens, you’ll pay significantly more when you get a new policy.
Restrictions if you have a car loan
If you have a loan on the car, you may not be able to cancel the car insurance or reduce your coverage to comprehensive only. Most lenders are going to require you to have comprehensive and collision coverage. They do this to protect their investment. You should protect your investment as well by adding GAP coverage.
If you don’t maintain the car insurance required by the loan, they are able to put force placed insurance in place and bill you for it. Typically, these policies are very expensive and will be a lot more than what you would pay with your own insurance company.
Can I pause my auto insurance?
We’re not aware of any insurance companies that allow you to pause your auto insurance policy. That’s likely because it creates a lot of potential problems including requirements by states and auto loan lenders.
There are some new insurance companies that are trying to think outside the box and are having these discussions, but for now you’ll have to keep your policy active and adjust your coverages to fit your situation as best as you can.
State requirements
Some states require that all registered vehicles maintain a minimum amount of insurance, regardless of their usage. Check your state’s regulations to avoid any legal complications. If you plan to cancel your registration and store your car for a long period, this might not apply.
The bottom line
Removing liability and collision and keeping comprehensive coverage only can be a great way to save on insurance while your car is in storage. You can also remove car insurance altogether if you’re willing to take on the financial risk yourself.
You need to take into consideration your personal risk tolerance, state insurance requirements and car loan requirements to make an informed decision.
Frequently asked questions
It depending on your situation. If you have a loan on your car, your lender will require that you keep coverage. You also need to check your states car insurance requirements for registered vehicles.
Yes, if you want to protect your car against theft, vandalism, fire and damage from weather and natural disasters such as wind, hail, lightning, floods and earthquakes.
You may be able to remove liability and collision and keep comprehensive coverage only. This can be a cost-effective way to protect your vehicle during its storage period.
We’re not aware of any insurance companies that allow you to pause your auto insurance policy. That’s likely because it creates a lot of potential problems including requirements by states and auto loan lenders.
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