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Do I Need Insurance For A Car That's In Storage?

Published: May 2015

Maybe you're planning a semester abroad, or spending the summer in a vacation home by the beach. There are a number of reasons why you might not need to use your car for a time, and why you might consider dropping your insurance while you're gone.

abandoned car

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 premium. But you might want to consider the drawbacks of canceling a policy and options to reduce your coverage instead.

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Drawbacks of Canceling 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.

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.

Additionally, you may not even have the option to drop your policy at all. For example, the Insurance Information Institute says that, if you have a car payment, your lender may require you to hold insurance as a condition of your loan.

Options for Maintaining Coverage

So, is there any way to safely save on insurance for a car that's inactive?

Your agent can help you decide what's best, but you might consider simply reducing your coverages (rather than dropping your policy altogether).

For instance, if your car will be 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. Comprehensive is the type of coverage that protects your vehicle in the case of theft, fire or hail damage — scenarios you might actually encounter while your car is in storage.

You'd likely enjoy a lower premium if you pared your policy down 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.

Some insurance companies may require that you state that your vehicle will be in storage for a minimum number of days before it will approve your request for the reduced coverage; for example, a 30-day minimum. During that time, you'll have to make sure not to take the car out for even a short ride, because you wouldn't be covered if you were to have an accident or if you were to damage someone's property while you were driving.

Keep the car snug in its storage spot, and then simply set a reminder to revert to your former coverage levels when you expect to need the vehicle again.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2017 Allstate Insurance Company, Northbrook, IL.
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