Definition and Example of Car Storage Insurance
There's no auto insurance policy called "storage insurance." It's only a term used to describe the least insurance coverage needed for cars that aren't being driven. You can often drop or reduce insurance that covers events while driving if your vehicle is parked in storage for a time, and you won't be driving it. In the best case, you can go with only comprehensive coverage. Some states will not allow you only to have comprehensive coverage, even if you're not using your car. The same goes for lenders if you have a lien against the vehicle, such as an auto loan.
- Alternate names: Parked car insurance, comprehensive-only insurance
For example, if your state allows it, you could switch to parked car insurance if you were going on an extended trip, and you wouldn't use your car for that period.
How Does Car Storage Insurance Work?
Because storage insurance is another type of coverage, it works the same way that coverage works. If you're allowed by state law to drop your insurance to liability coverage only, then it works the same as liability. If you can only drop it to comprehensive, you can file a claim with your agent if you have a comprehensive policy in place, and something happens to your parked car.
Most states cancel your registration if they allow you to cancel liability insurance while your car is in storage. However, you'll often have to turn in your license plates and store the vehicle in a locked facility, not on the street.
Your insurer will send an adjuster to assess the damage, so make sure you document everything with pictures. You should be present so you can show the adjuster what happened. You'll only have to pay the cost of your policy deductible if you have comprehensive insurance, and your parked car is damaged due to any of these events.
People often incorrectly assume that their homeowner's insurance would cover a car if damage occurs in their garage. You may be able to add such a rider to your auto policy, but you'll still have to have comprehensive coverage for your vehicle in most cases.
How to Get Car Storage Insurance
Most car insurers allow coverage to be changed at any time during a policy period. However, they typically do not allow changes to policies if a major natural disaster is on the way, such as a hurricane, because too many people would be adding and subtracting policies when convenient, rather than paying into the system and keeping it going.
Storage insurance is best for seasonal savings. Trying to save a few bucks by frequently switching coverage could cost you big if you forget and drive a vehicle without the proper coverage.
To reduce your insurance bill for a vehicle you're not driving, you should contact your insurance agent to discuss your options. They'll know what the minimum coverage is in your state—they may even be able to offer you a customized policy for the period you'll be gone and not driving. After all, a car in storage is less of a financial risk to the insurance company than one on the road.
- There is no specific "car storage insurance" policy. The term refers to the practice of minimizing your coverage while your car is stored away.
- You will need a minimum of comprehensive insurance to be covered against events that might happen to the car while it is in storage.
- State laws vary regarding whether you can drop other forms of car insurance.