Cash News
Whether you’re going overseas for a long trip or simply want somewhere to keep your classic car, you might consider car storage insurance at some point.
This type of coverage – also referred to as comprehensive-only coverage or parked car insurance – protects vehicles in storage from damage that could occur while it isn’t being driven. This would include weather events, fire, vandalism, theft, and other unforeseen situations.
Though you could simply cancel insurance for a car you’re not going to drive, you would be on the hook for repairs in any of those circumstances.
That said, a lot of factors will determine whether you need car storage insurance coverage, so let’s start with the basics.
When do you need car storage insurance?
Technically, the term is a little misleading as there is no such thing as a car storage insurance policy.
What we’re actually talking about is reducing your existing car insurance coverage down to comprehensive-only policy – removing any other types of coverage for the car.
To determine whether this move is right for you, think about these three things related to your stored car:
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Frequency of use: If you use your car seasonally – or still drive it every now and then – you’ll likely want to keep full coverage. Options like collision and liability coverage are necessary if you’re going to be driving the car, even infrequently.
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Storage duration: How long do you plan to store the car? Just a few months? Then you should probably keep your coverage as is. A few years? Then you’ll probably want to consider dropping some of your coverage options.
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State laws and regulations: Depending on where you live, you might not be able to drop your coverage to comprehensive only, even if you aren’t driving the vehicle. Check to see what the minimum auto insurance requirements are in your state.
You might also consider vehicle storage insurance when you’re beginning a restoration project, when you might be going on a long-term trip or military deployment, and when you know you simply won’t be driving a vehicle for an extended period of time.
The deductible, which is the minimum amount you’ll have to pay in the event of damage, usually ranges around $500 to $1,000. You may be able to choose a higher deductible amount – which would keep your premiums lower but would also mean you would pay more out of pocket.
In the event of damage to your car, you would file a claim and pay the deductible, then your insurance company would cover the remaining amount.
Advantages of car storage insurance
So why not drop coverage altogether if you aren’t going to be using a vehicle?
Well, legally, you actually don’t need coverage on a stored car. That said, you’re setting yourself up with a lot of risk if you don’t at least keep comprehensive coverage on your car insurance policy.
This coverage will protect your car against unforeseen events like theft, vandalism, fire, natural disasters (tornadoes, hurricanes, etc), falling objects like big trees and hail, and even damage caused by animals.
Another advantage here is simply cost. By paying for comprehensive-only coverage, you’ll save on your insurance costs by opting out of other coverages like collision or personal injury protection. If you’re still paying off your stored car, however, the lender might require both comprehensive and collision coverage for the life of the loan.
Last, keeping comprehensive coverage allows you to maintain a continued coverage history. An insurance lapse could significantly increase your rates when you attempt to obtain coverage in the future.
Alternatives to car storage insurance
If you’re not sure about getting insurance for your stored vehicle, you have other options:
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Temporary suspension of coverage: Some insurers might allow you to temporarily suspend your coverage without canceling it. The big risk here is that if your car is stolen or damaged during the suspension then you’re on the hook to pay.
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Reducing coverage to minimum requirements: Here, you would basically do the bare minimum your state requires for coverage. That might be liability insurance only or also include uninsured motorist coverage.
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Canceling insurance altogether: You do have the option of completely canceling your coverage on a car being kept in a storage unit. In this case it could not be driven on a public road. And it’s still risky because, without comprehensive car insurance at least, your car won’t be protected from weather events and other mishaps. You pay higher premiums when you go to get insurance again in the future.
Also, without liability coverage, make sure you’re not driving the vehicle at all. Not only is that illegal in most states, but you’d also pay the bill for any damage or injuries you caused if an accident occurred.
Factors affecting car storage insurance premiums
When it comes to the cost of insuring your stored vehicle, your premium will be based on several factors.
Like any type of vehicle insurance for your car, the type of vehicle you have and its value will be a large factor. A new Mercedes will cost a lot more than a beat up 15-year-old Honda. Your insurance provider, as well as where you live, will also play a role in your premium’s cost. Some insurance companies won’t allow you to drop to a comprehensive-only policy. If you do get approved, these rates can vary widely based on the state you live in.
Other factors such as the security in place at your storage facility, as well as your insurance history (have you had continuous coverage?) and credit score could also affect your insurance rates.
How to obtain car storage insurance
Each insurance company might treat car storage insurance differently, so contact your current carrier or insurance agent to discuss your options.
For older, more expensive antique cars, you might consider classic car insurance. Though some standard providers, like Geico, offer this type of insurance, and you could get a discount if you bundle multiple policies such as homeowners or renters. Still, you might find more storage insurance options and better rates with specialty providers such as Hagerty. These companies offer policies specifically designed for classic and custom cars. They take into account more factors than just the actual cash value of the car – which is what a standard auto insurance policy might cover.
Get car insurance quotes from multiple providers to find out what your potential premium might cost. Then, choose the policy that best fits your needs while your car is in storage.