Consumers might not know about options for saving on insurance when storing a car. Car storage insurance enables policyholders to pause some of the features of their policy while their car is not being driven. Storage insurance for a car removes its ‘active’ status but complies with state laws that require drivers to hold liability auto insurance.
Drivers might consider car storage insurance for various reasons, including extended traveling, military deployment, or limited, seasonal car use. Insurers commonly offer insurance for stored cars to existing policyholders who do not plan to drive their cars for several months, though individual terms may vary by state regulations.
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What Is Car Storage Insurance?
Car storage insurance protects your car from damage that can occur when parked. Unlike liability and collision insurance, car storage insurance covers non-driving accidents like vandalism, fire, and falling objects that can still impact a car off-road in storage.
Car storage insurance is sometimes offered by insurers as comprehensive-only auto insurance. A traditional comprehensive policy includes liability and collision coverage, and acts of God, while comprehensive-only policies eliminate the need for liability and collision culpability. Most traditional plans offer a choice of the following types of auto insurance:
Protects your car from damage due to events beyond your control, or acts of God, including severe weather, theft, fire, and vandalism
Covers damage caused by your car impacting another car, person, or non-moving object
Minimum requirement in nearly every state; Covers damage to other drivers and their cars and/or property
How Does Car Storage Insurance Work?
Car storage insurance, or comprehensive-only insurance, covers events that could damage your car while it is in storage. Examples of events covered by car storage insurance include but are not limited to hailstorms, fallen trees, flooding, fires, theft, and vandalism. While terms vary, car storage insurance plans generally cover some or all expenses resulting from such damage.
If your car is totaled due to damage sustained while in storage, your insurance covers the cost minus the deductible, provided the nature of the damage is included in your policy coverage. In this case, the insurance company calculates the actual cost value of the car based on factors like age and mileage to determine the payout amount.
In cases of major damage for which the repair cost exceeds the deductible amount, drivers who hold car storage insurance can pay the deductible and let the insurance company cover the rest. Most insurance companies require a minimum storage duration of 30 days.
Should You Get Car Storage Insurance?
While drivers are not required to pursue car storage insurance, this paired-down coverage suits policyholders looking to maximize their savings. Car storage insurance can not only save you money in the long run but also protect your car from unexpected events while it sits unused.
A variety of circumstances can cause damage to your car while it is being stored. Even a properly-stored vehicle can potentially sustain damage due to flooding, fires, or falling objects. Stored cars can also fall prey to acts of vandalism, damage from animals, or theft, which could lead to high out-of-pocket costs for the uninsured.
Should You Cancel the Vehicle’s Insurance Coverage When Putting It in Storage?
Some drivers may question whether they should cancel their coverage instead of considering car storage insurance. Canceling coverage is often not a good idea for several reasons, including going without protection for your car and incurring a lapse in your insurance history.
In most cases, insurance companies strongly encourage you to maintain an active policy, but they cannot stop you from canceling it. Additionally, drivers who lease their cars are typically under strict regulations from their lender to maintain liability insurance, not to mention driving without insurance is illegal in any state. Explore the primary reasons for keeping car storage insurance below.
No Accident Protection
Canceling insurance coverage on a parked car means the vehicle is unprotected. A vehicle in storage may still sustain damage from unexpected events like flooding, fires, or other acts of God. Long-term storage facilities may also be vulnerable to vandalism or theft, which can be devastating to drivers without car parking insurance.
Additionally, no insurance for a parked car means no accident protection. A driver who cancels their insurance on a stored car decides to drive it, and gets in an accident is unprotected from any potential damages, whereas a driver with car storage insurance can easily change their plan back to road-worthy coverage at any time.
Insurance History Coverage Gap
Canceling an auto insurance policy on a stored car can cause a gap in your auto insurance history, which is a negative mark on your record in the long term. Insurance companies tend to label drivers who have had a lapse in coverage ‘high risk’ regarding future benefits.
Drivers who cancel their insurance instead of pursuing parked car insurance may encounter higher rates and fewer coverage options when they decide to buy a new policy down the line. If they can secure coverage, they may be subject to an underwriting process and a waiting period.
Illegal To Drive Without Insurance
Should you cancel your coverage on your vehicle in storage but decide to drive it anyway, you would be doing so illegally. This offense carries high fines and could result in the revocation of your license and registration. Car storage insurance protects your car while in long-term storage and can be changed back to traditional coverage when you are ready to drive again.
While states uphold laws for drivers to maintain minimum liability insurance, lease agreements also include insurance requirements. Canceling your coverage on a leased vehicle in storage may violate the terms of your lease and, therefore, impact your ability to legally put your car back on the road later.
Lastly, in addition to driving without insurance, many states require insurance to be maintained on a car with active registration. So if the car is registered, it also needs to be insured, even if it’s not being driven. Without insurance, the customer could be penalized by fines or license suspension.
How Much Does Car Storage Insurance Cost?
Car insurance companies consider a combination of factors to determine rates for coverage, including a driver’s age and credit score and the make, model, and condition of their car. Estimates also depend on the level of coverage a driver needs, from liability to collision, to comprehensive.
Car storage insurance, or comprehensive-only insurance, tends to run cheaper than policies that include collision protection. According to the National Association of Insurance Commissioners, Americans spent an average of $160 per year, or $13 per month, on comprehensive-only coverage from 2015-2019.
How To Buy Car Storage Insurance
Policyholders interested in car storage coverage should call their insurance company for details. Most companies require that your car is stored for at least 30 days for car storage insurance. Insurance carriers typically also require candidates to maintain minimum liability coverage on a separate vehicle to lower their coverage to inactive status on another.
Other common requirements include owning your vehicle since, technically, dropping the liability insurance on a leased car violates the terms of the lease agreement. Insurance companies cannot knowingly break the law to provide you with comprehensive-only coverage. Additionally, some states require drivers to cancel vehicle registration in storage.
Drivers must specifically request car storage insurance from their insurance provider since eligibility varies from person to person and insurance companies rarely advertise this service. If your initial query determines you are eligible, but your carrier does not offer car storage insurance, take the opportunity to shop around at other vendors.
Preparing a Car for Long-term Storage
The following minor considerations, when paired with car storage insurance, can help optimize your car’s road readiness down the line.
- Disconnect the battery or rev it up periodically. Disconnect the negative cable from the battery or start the car from time to time to keep it charged.
- Clean the exterior. Prevent rust by cleaning any spots or chips, and consider a wax for the utmost protection.
- Check your tire pressure. Tires should be properly inflated, especially in cold weather, and can also be set up on jacks to prevent flat spots over time.
- Store it inside! Consider only covered facilities such as a garage or large storage unit to protect your car from elements like rain, snow, and hail.
- Fill up the tank. Topping off the tank keeps the rubber seals and the engine lubricated.
- Discourage pests. Plug up holes like the exhaust pipe and the intake valve.
- Change the oil. Old oil can damage your car’s engine if left alone for long periods.
- Don’t pull the parking brake. A tire choke is a better choice than engaging the parking brake, which can fuse with the brake rotors over time.