There are various reasons why people may put their vehicles in storage for a time and this reason and how long it will be taken off the roads play important roles in deciding how to insure it. Motorists would naturally think that they could save money on their premiums since their automobile wouldn’t be driven for some time. This could be achieved but there are other considerations to take into account too.
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 as most of them insist on selling package policies.
When a car isn’t driven on the roads it won’t have traffic accidents but it may have other accidents even in a safe parking lot, as well as vandalism, fire, flood and other weather-related damages. It may even be stolen. That is why it is a good idea to keep Comprehensive coverage if it is worth some money.
Storage insurance or Comprehensive coverage can be a very economical solution because it can reduce the premiums substantially and still keep you insured. Also, your policy won’t lapse and therefore your insurance history would be kept unbroken, which is important in order to keep your no claim discounts.
You may have to either fill a form with the DMV to confirm that the vehicle is off the road or even return the registration and license plates in some states when a car isn’t driven. If you have a loan on it, your lender may insist on keeping Collision and GAP coverage too depending on how much is left outstanding on the loan. Also, you have to make sure that you reinstate Liability coverage before it can go back to the roads.
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.
Luckily there may be other solutions available for them. 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 away at university because they won’t be driving the car they left locked away in a garage back home.
Another option for cars, which are in and out of storage, 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.