Do I Need Insurance for a Car in Storage?

If the vehicle isn’t driven or not in drivable condition and kept in a private property or storage facility, you don’t legally have to insure it. However, you will need to submit an affidavit of non-use and return the registration and license plates back to the DMV to avoid getting penalized for dropping liability coverage. You may not be able to drop coverage if you have a loan on the vehicle. And dropping coverage for a short period of time may work out more expensive due to losing continuous coverage insurance discount.

Depending on the value of the vehicle, the better solution may be to arrange storage 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 a lapse on your policy and get protected for the non-driving related perils.

First of all, it isn’t probably a good idea to consider dropping coverage if the car is taken out of commission for less than a month because most insurers won’t offer storage auto insurance for such short periods. Secondly, you cannot drop Liability coverage if the vehicle is still on a public road. It needs to be in a locked garage or a private property.

There are two other considerations. First of all, how long would it be in storage and would it be driven at all in that period? If the vehicle is going to be in a locked garage for a long time, you may want to find an insurance company that would sell you Comprehensive coverage only at that time 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” are different in each state.

It is very important to make sure at least Liability coverage is reinstated before the vehicle can be driven again. Reinstating Collision coverage too is often a good idea. Otherwise, you will face penalties for driving uninsured and have to pay any damages and injuries you may cause and your own losses out of pocket.

The above solutions can work well for motorists who are deployed or sent abroad for work or spending the whole winter in another state far away. They are unlikely to use the vehicle even for a short period of time.

But this may not be the case for a college student who is likely to come back home often for the breaks and holidays and may want to drive the vehicle at those times. In such cases, it may not be practical to keep removing coverage and filling forms with the DMV and keep reinstating standard auto insurance.

Some companies consider the situation and offer large discounts for people who drive their automobile only for a limited time in a year. For example, they offer large discounts for students who are at least 100 miles away at college because they won’t be driving the car they left behind.

Another option for cars in and out of storage often, may be to get telematics or pay-per-mile insurance. Such policy premiums are calculated based on usage. So, if the vehicle is only driven a few miles a year the insurance company would be able to see it and charge much lower premiums for it.

Pausing or suspending automobile insurance coverage completely are the other options if you aren’t going to drive the vehicle for a while and it will be parked in a storage facility or a private property. Pausing doesn’t cancel the policy but suspends the coverage for a period and allows you to avoid paying the premiums in that period. Most carriers don’t offer the option of pausing a policy.

Cancelling the coverage completely may be an option if you don’t know when and if at all you will want to drive the vehicle again and it isn’t worth much anyway. Also, you may have to pay back the loan on it (if there is any) to be able to drop coverage. The problem with this option is that you may have to pay a lot more for auto insurance when you want coverage again. But this may not be a problem if you have insurance for another automobile.