If you want to save money on your car insurance, and who doesn’t, then you should be aware of the laws in your state when it comes to putting your vehicle in storage. Car insurance may not be required in this case, making it possible for you to save some money.
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Many people purchase cars to keep in storage for a variety of reasons. The most common reason is that they purchase a vehicle to fix up and they plan on working on it for a number of years.
Another reason to keep a car in storage rather than driving it is if you have a classic car. In many cases, rather than regular storage, you might keep your classic car in a climate controlled environment or even parked in your garage at all times.
In order for a vehicle to be qualified as a stored vehicle, it must be kept in a locked facility. You cannot park your car in your yard and claim that you are storing it; this is not considered storing, only parking.
If You Cancel Your Car Insurance Due to Storage, Car Insurance Companies will Report Your Cancellation to Your State
Okay, you’ve decided to cancel your car insurance because your car is in storage. Car insurance companies will automatically inform your state DMV, or auto insurance authority, of your cancellation. The reason that they do this is because they are required to do so by law.
What typically happens is that you will receive a notice from your DMV or other insurance authority that your insurance has been cancelled and you have a certain amount of time to provide proof of insurance.
If you live in a state that allows you to cancel your insurance while it is being stored, then you will also be informed that you must turn in your license plates while your vehicle is being stored or else start a new insurance policy.
Every state requires that any registered vehicle maintain an insurance policy. Once you store your vehicle, by turning in your plates you are “unregistering” it until the time comes that you want to drive it again.
You need to be aware that if you take this option, then your vehicle is uninsured. Homeowners insurance will cover the cost of your property inside of your vehicle if it is stolen, but it won’t cover the loss of your vehicle itself. This is something to consider before you make the decision to completely cancel your insurance.
When Your Car is in Storage, Insurance Companies have other Insurance Options
Many insurance companies offer insurance for vehicles that aren’t being driven at a much reduced rate. One option is something that is COMP insurance.
- COMP insurance is simply comprehensive coverage only and it is designed to provide coverage for your vehicle while you are storing it against damage caused while it is being stored. This also covers theft of your vehicle is being stored, but does not provide liability insurance, which means you would still have to turn in your tags because you won’t be carrying the state minimum.
- Another option is reduced mileage coverage. This coverage is simply a reduction of what you already have based on a new mileage calculation. Typically, you can save between $200 and $400 a year when choosing this option. In addition, because you won’t be driving, you should also consider dropping your collision insurance, if you have it.
- Several insurance companies are offering something called pay as you go insurance. Basically, your vehicle is tagged with a tracking device and you only pay a base amount plus a predetermined amount for each mile that you drive. If you aren’t driving, then you won’t have to pay anything but the small base amount.
You can also choose to purchase storage car insurance. This is usually available though your car insurance company. If not, check with the storage company that you are using, they often provide this coverage to protect you against theft and damage while your vehicle is being stored.
When Your Car is In Storage: Car Insurance Costs and Storage Costs Can Add Up
One thing that you need to think about when making the decision about whether to keep your insurance on a stored vehicle is the cost involved. The truth is that storing a vehicle securely isn’t cheap. Add to that the cost of insurance and the amount may simply be too much.
In order to save as much money as possible, you need to shop around for different options.
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