What Is Car Storage Insurance?

Definition & Examples of Storage Insurance

Man smiling and looking out of the window of his car
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If you don't plan on driving your car for a while, you might consider saving on insurance. A car storage insurance policy, which is technically just comprehensive insurance, will cover anything that could happen to your car while it's parked or stored away.

Just because you're not driving your car doesn't mean nothing could happen to it. Learn why storage insurance is important, who can use it, and when it can come in handy.

What Is Car Storage Insurance?

Technically, there is no auto insurance coverage called "storage insurance." It is a kind of slang term people often use to describe minimal insurance coverage for cars in storage. Since you're not driving your car when it's parked in storage for an extended period, you can often drop (or minimize) insurance that covers events while driving. In the best case, you can only go with comprehensive insurance coverage, but most states and lenders (if you have a lien on the car) will not allow you to only have comprehensive coverage, even if you're not using your car.

If you can't drop liability, uninsured motorist, collision, or other coverage, you can reduce those coverages to the minimum allowable level while your car is in storage.

  • Alternate name: Parked car insurance

What Does Car Storage Insurance Cover?

Technically, comprehensive coverage is the only coverage you need for a car in storage. It protects a vehicle against fire, theft, building collapse, vandalism, and any other damage that could happen to the vehicle while sitting still. If you have comprehensive insurance and your parked car is damaged in a storm or destroyed in a garage fire, for instance, you'll only be responsible for the cost of your policy deductible.

People often assume that a car damaged in their garage would be covered by their homeowner's insurance, but that's not the case. You may be able to add such a rider to your policy but, in most cases, you'll need to have comprehensive coverage for your vehicle.

How Does Car Storage Insurance Work?

If you determine that you won't be driving your car for an extended period—maybe you'll be out of the country for a while or will be able to share one car within your household—talk to your insurance agent about options for your policy. They'll be able to help you minimize your nonessential coverage while staying in compliance with the law.

At the very least, if you don't want to be financially responsible for unexpected damages to your car while it's stowed away, you'll need to have comprehensive coverage. If you have a comprehensive policy in place and something happens to your parked car, you can file a claim with your agent. Your insurance provider will probably send out an adjuster to assess the damage, so always make sure you document everything with pictures, and that you are there to show the adjuster what has happened.

If your state will allow you to cancel liability insurance while your car is in storage, it will also cancel your registration, meaning you are no longer legally allowed to drive the vehicle. You'll often have to turn in your plates and store the car in a locked facility (not on the street or in a garage).

Switching to Car Storage Insurance

Most car insurance policies allow coverage to be changed at any time during a policy period. Sometimes physical damage coverage—including comprehensive coverage—can be frozen from being added to a policy if a major natural disaster is on the way, such as a hurricane. At this time, you would not be able to add comprehensive coverage to a vehicle. Contact your agent as soon as you know you won't be driving for an extended period of time.

When to Get Car Storage Insurance

Putting a vehicle in storage is great for those people who have multiple vehicles and only drive one per season. It is most often used for sports cars that do not handle well in the winter months or are too valuable to have out in the elements. Maybe you inherited a vehicle and are not driving it currently, or maybe you want to wait to sell a vehicle yet want it protected against possible damage. Comprehensive coverage is the perfect solution because it is usually very affordable.

The most important thing to remember about putting a vehicle in storage is to call your insurance agent to add coverage back on when you will be driving the car again. Even if it is a one-time drive a short distance from your home to the body shop, call your insurance agent. The last thing you need is a collision with no car insurance coverage.

Storage insurance is best for seasonal savings. Trying to save a few bucks by switching coverage biweekly could cost you big if you forget and drive a vehicle without the proper coverage.

Alternatives to Car Storage Insurance

There are many options for reducing your insurance coverage when you're driving less or not at all, and your agent can help you decide which option works best for you. Of course, if you really want to save money, the best thing to do is sell the car you're not driving so you can completely cancel your insurance and stop paying property taxes for a vehicle you aren't using.

Key Takeaways

  • Technically, there is no specific "car storage insurance" policy. This is a shorthand for minimizing your insurance coverage while your car is stored away.
  • To be covered for events that might happen in storage, you will need comprehensive insurance.
  • State laws vary in terms of whether you can drop other forms of car insurance.

Article Sources

  1. Allstate. "Do I Need Insurance for a Car That's in Storage?" Accessed Sept. 11, 2020.

  2. Progressive. "What Is Comprehensive Insurance?" Accessed Sept. 11, 2020.

  3. Rural Mutual Insurance Company. "If My Garage Burns Down and My Car Is in the Garage, Is My Car Covered Under My Home or Auto Insurance?" Accessed Sept. 11, 2020.

  4. State of Connecticut Department of Motor Vehicles. "Insurance Compliance - Frequently Asked Questions." Accessed Sept. 11, 2020.

  5. Rockland Insurance. "Understanding Insurance Binding Restrictions." Accessed Sept. 11, 2020.