Do I need insurance for a car that's in storage?
Last updated: June 2023
Maybe you're putting your car in storage while you take an extended vacation or spend the winter in a warmer climate. There are several reasons why you might not need to use your car for a time, and why you might consider dropping your car insurance coverage while your car's not in use.
But is it a smart thing to do? Does it make sense to cancel the insurance on your car while it's in storage?
You may realize some short-term savings by not paying a monthly insurance premium for your stored car, but there are drawbacks to canceling a policy. You might want to review your options for reducing your coverage instead.
Drawbacks of canceling coverage for a stored car
Here are three reasons why it's important to think twice before canceling insurance while your car is in storage:
1. Canceled policies create gaps in coverage.
For one, canceling your coverage creates a gap in your insurance history that may put you in a high-risk category with your insurer. That may mean you have to pay a higher premium when you decide to reinstate your policy down the road.
2. Your car won't be protected against accidents.
Without insurance, you'd also be solely responsible for anything that happened to the vehicle during its time in storage. If a tree were to fall on the garage or some other mishap were to take place, you'd likely have to pay out of pocket to repair the car.
3. Canceling coverage may violate policy requirements.
Additionally, you may not even have the option to drop your policy. For example, if you have a car payment, your lender may require you to hold insurance as a condition of your loan.
Car storage insurance options
In some cases, you may decide that it makes sense to temporarily reduce your car insurance coverage while your vehicle is in storage. Here's a look at some options:
If you have a car that will be kept in storage for 30 days or more, you may be able to suspend your liability and collision coverages, which are both driving-related and, instead, maintain only comprehensive coverage on the car while it's in storage.
Comprehensive coverage helps pay to repair vehicle damage from things like theft, fire or hail — scenarios that are still possible while your car is in storage.
You may notice a lower premium if you pare down your policy like this, because you'd only be paying for a single coverage. In addition, you'd prevent yourself from having a lapse in coverage that could result in higher costs in the future.
Keep in mind, however, that if you are financing the vehicle in storage, your auto lender may require both collision and comprehensive coverage until the loan is paid off.
What are the requirements for comprehensive-only coverage?
Some insurance companies may require your vehicle to be in storage for a minimum number of days before they will approve your request for the reduced coverage. The car must be in storage for 30 days or more to qualify for suspense. Suspense can start on day 1 of storage time. Don't take your car out even for a short ride while the liability coverage on your policy is suspended, because driving without liability coverage is illegal in most states and you wouldn't be covered if you had an accident or damaged someone's property while you were driving.
Do you need insurance for car that doesn't get driven?
You may wonder if you need insurance for a vehicle that is not in use, even if it's not kept in storage. For instance, suppose you've inherited an extra vehicle or your hobby car is disabled for an extended period while you rebuild its inner workings. Even if your car isn't on the road, it may be a good idea to maintain certain coverages on it because mishaps can happen even if your car never leaves the driveway.
For instance, if you don't have comprehensive coverage, you'll need to pay out of pocket for repairs if your car is damaged by hail or a fallen tree. So, even if you suspend other coverages for a car you don't drive, you may want to consider keeping comprehensive coverage. Your insurance provider can explain what coverages you may need or want to consider if you own a vehicle that's not in use.
There's a lot to consider when it comes to insurance for a car that you're not driving. If you decide to reduce your coverage for a vehicle that's in storage, be sure to set a reminder to revert to your former coverage levels when you expect to need the vehicle again.