Do I need liability car insurance for a stored car?

If you own a vehicle and plan to keep it in storage for some time, you may wonder what you need to do about insurance. If you have a policy, should you keep paying the installments or do you need a different type of insurance in this situation altogether? 

We know this can be confusing, so we have researched the topic and provided answers below.

Do you need car insurance for a stored car?

The answer to this question is “not necessarily.” Whether you want to go about insuring a stored vehicle will depend on whether you intend to maintain the current registration and also if you want to protect the car from damage, theft, or vandalism when it is off the road.

What about vehicle registration for cars in storage?

Most states require that you carry the minimum liability auto insurance coverage while you have a valid registration in place. Indeed, some states insist that insurance companies notify them directly when a policyholder cancels their coverage or fails to make their payments. 

Case in point, New York has an insurance information and enforcement system, and regulators will send you a warning notice if they find out that you do not have current insurance on a registered car.

Should you cancel your registration?

Of course, you can cancel your registration, which may be an option if you intend to store the car for an extended period. You will need to research the requirements in your state, but you might also have to return your tags to your state’s Department of motor vehicles (DMV).

If there is a lapse in your insurance coverage, this may show on the central insurance database that companies refer to when setting premiums. If you apply for coverage at a later date, you may have to pay more due to that earlier lapse.

It’s a Good Idea to Carry at Least Some Car Insurance for a Stored Car

When you cancel your insurance altogether, your vehicle will be vulnerable. If your car sustains damage while in storage through vandalism or a freak weather event, you may be out of pocket as you will not be able to file a claim with your car insurance company. 

Similarly, someone could break into the storage unit and steal the vehicle with similar repercussions.

Can you get cheaper auto insurance for a stored car?

You may be able to get reduced-rate car insurance for stored vehicles. 

You won’t need liability or collision coverage as you will not be driving the car, but comprehensive coverage is crucial as it will cover you against the following:

• Floods
• Storms
• Theft
• Fire
• Vandalism

In addition, some insurance companies offer policies based on the miles you drive, so shop around and see if you can find an option that makes the most sense in your situation.

Do you have to have auto insurance for a stored vehicle with a loan?

If you do not own the car yourself but have a lease with a finance company, the company will likely insist that you carry comprehensive coverage to protect its interest in the vehicle.

As mentioned above, even though you may not be driving the car, it will still be at risk of vandalism, theft, flood, fire, or severe weather while in storage.

The Bottom Line on Car Insurance for a Stored Car

If you have a car with current registration, your state may insist that you carry insurance even if the vehicle is in storage. If you intend to keep your car off the road for an extended period, you may want to cancel your registration. 

While you will then be able to cancel your insurance payments without hearing from the state, this may have repercussions. For example, you may have to pay an increased rate for car insurance in the future due to the lapse in coverage. 

In most cases, it’s recommended to have comprehensive coverage to protect your vehicle from vandalism, storms, or theft while in storage. If your car has a lien from a finance company, the company will likely insist that you carry this type of coverage as well.