Do I Need Insurance for a Car in Storage?

If your vehicle isn’t being driven or is in an undrivable condition and is stored on private property or in a storage facility, you may be able to get an exemption from your state’s minimum insurance requirements. This can help you avoid paying for insurance when the vehicle is not being used. To do this, you may need to submit an affidavit or declaration of non-use to the DMV or the relevant state agency. This document typically certifies that the vehicle is not in use and will not be driven on public roads. Some states may require you to return the vehicle’s registration and license plates to the DMV as a part of the non-use process. This helps confirm that the vehicle is indeed not in use.

Virtually every state mandates that vehicles maintain minimum liability insurance coverage, regardless of whether they are actively in use. This mandate is designed to guarantee that if your vehicle causes injuries or damage to others, whether it’s in motion or parked, there is a provision in place to compensate those impacted. So, if your vehicle is still accessible on a public road, it’s usually not possible to get an exemption for liability coverage. The vehicle must be securely parked on private property to potentially qualify for such an exemption in most states.

If you have a loan on the vehicle, your lender may require you to maintain insurance coverage, even if the vehicle is not in use. Lenders often require borrowers to have Comprehensive and Collision coverage to protect their financial interest in the vehicle. Dropping coverage for a short period and then reactivating it later can lead to higher insurance costs in some cases. Many insurance providers offer discounts for continuous coverage, and a lapse in coverage could result in the loss of these discounts, making the insurance more expensive when you reinstate it. It’s essential to check your state’s specific regulations and consult with your lender and insurance provider for guidance.

Insurance Solutions for A Car In Storage

Depending on the value of the vehicle, the better solution may be to arrange car storage insurance coverage, which allows you to drop driving related Liability and Collision covers and let you keep Comprehensive coverage to protect the vehicle against damages beyond your control like fire, vandalism, weather related damages, flood and theft. This way, you can save up to 80% on your vehicle insurance, avoid losing your continuous insurance coverage discount and get protected for the non-driving related perils.

If the vehicle is going to be in a locked garage or private parking for a long time, you may want to find an insurance company that would sell you Comprehensive coverage only to make sure you are protected against any damages that may come to it. Some companies may not offer this coverage on its own and rules of storage coverage or also known as “parked car insurance” may be different depending on the state.

It may not be advisable to contemplate canceling coverage if your vehicle is temporarily out of commission for less than a month. And most insurers typically don’t provide vehicle storage insurance for such brief periods. Even when it is parked securely in a garage and won’t be driven, canceling your coverage could leave your vehicle uninsured if any harm comes to it due to unexpected events during that time. In addition, you need to deal with the DMV about dropping liability coverage. In most states, insurers are required to let the DMV know when a policy is dropped.

Auto storage insurance may be well-suited for individuals who are deployed or temporarily residing abroad for work purposes or spending extended periods in another state, such as the entire winter season, during which they are unlikely to use their vehicle even briefly.

However, this approach may not be practical for individuals like college students who frequently return home during breaks and holidays and may wish to use their vehicle during those times. In such cases, continuously adjusting coverage and dealing with DMV paperwork to reinstate standard auto insurance can become cumbersome.

Fortunately, some insurance companies recognize these situations and offer substantial discounts for individuals who use their vehicles only for a limited time each year. For example, some auto insurers offer substantial discounts to college students who attend schools located at least 100 miles away from their home and choose to leave their vehicles behind while at school. This accommodation recognizes that they may not use the vehicle regularly during their academic terms but wish to retain the option to drive occasionally.

Another viable option for vehicles frequently going in and out of storage is to consider telematics or pay-per-mile insurance. These policies determine bulk of the premium based on actual usage. Consequently, if the vehicle is only driven a few miles annually, the insurance company can accurately assess this and offer substantially lower premiums.

For classic car owners, it’s essential to secure classic car insurance that acknowledges the unique nature of their vehicles, which are typically not driven daily. This specialized insurance typically offers lower premiums and may include mileage restrictions as a standard feature.

In cases where uncertainty surrounds the future use of the vehicle and its value is relatively low, canceling coverage entirely might be a consideration. However, it’s important to note that if there is an outstanding loan on the vehicle, settling it may be necessary to terminate coverage. The drawback of this option is that when you eventually seek coverage again, you may face considerably higher auto insurance rates. Nonetheless, this may not pose a problem if you have insurance for another vehicle.

Reinstating at least Liability coverage is of utmost importance before you can resume driving the vehicle. Additionally, considering the reinstatement of Collision coverage is often a prudent decision. Failing to do so could result in penalties for driving without insurance, leaving you responsible for covering any damages, injuries, and personal losses that may occur out of your own pocket.