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

Updated: December 2017

Maybe you're putting your car in storage while you spend a semester abroad or at a 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.

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

Covered vehicle in garage.

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.

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Car Storage Insurance 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 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 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.

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.

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 (for example, a 30-day minimum). Don't take your car out even for a short ride while the liability coverage on your policy is suspended, because you wouldn't be covered if you had an accident or damaged 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.

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This content is for informational purposes only and may not be applicable to all situations.

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. © 2018 Allstate Insurance Company, Northbrook, IL.
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