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The term “parked car insurance” is a bit of a misnomer. Car insurance companies instead offer "storage coverage" as an interim solution when a car won't be in use for an extended period of time. State- and insurer-specific regulations will apply in any long-term car storage coverage situation, so it may be a safer bet to cancel your registration and drop your coverage completely. Let's examine the options.
If you have a vehicle you only drive at certain times of the year — or a vehicle that simply isn’t running — the idea of car insurance for a parked vehicle is appealing. Insurance companies offer “storage coverage” to accommodate these scenarios. With storage coverage, liability and collision coverages are dropped, leaving comprehensive-only coverage. A car storage insurance policy will only protect against the following damages covered under a typical comprehensive coverage claim:
The idea of storage coverage is to keep your vehicle parked in one place, ideally in a locked garage and off the street. This car insurance coverage will drop your premium significantly — sometimes by as much as 80%. Storage coverage applies to vehicles used irregularly, cars in need of repair, or an auto owned by a deployed military member. The potential downside of storage coverage relates to state vehicle registration laws.
Excluding New Hampshire, all states require drivers to carry at least minimum liability insurance as part of their car insurance policies. If you drop this important insurance coverage, you risk license and registration suspension. The workaround for this is to cancel your registration, remove the vehicle from public roads, and follow the necessary protocols required by your state.
Your insurance company might require you to insure another vehicle to meet your state’s minimum liability requirements.
There’s a couple of things to think about here. If your vehicle is registered with your state and parked on a public road, it needs to be insured for at least your state’s liability limits. For example, if you were living in Texas, you would need the following coverage limits in your auto insurance policy:
The next thing to consider is the risk of owning an uninsured financial asset. If you’re parking a car temporarily, it won't be insured against damages from a hit-and-run accident.
If someone hits your parked car — that is not in storage — you would simply handle this situation as a regular claim. If your vehicle has comprehensive-only protection, the situation is much different. Because a stipulation of storage protection is to keep your vehicle away from other cars, you have no protection in a hit-and-run scenario. There are a couple of reasons for this:
If someone does hit your vehicle but they have insurance, you would file a claim under their liability property damage coverage.
At the end of the day, car insurance for a parked car will involve calling your insurance company and seeing if they offer this coverage. Many companies require that your car is in storage for a minimum of 30 days to qualify for parked car insurance. Still, here is a simplified step-by-step process for getting car insurance on a parked vehicle.
If your current insurance company does not offer parked car insurance, consider that as an opportunity to shop around for new insurance quotes. Many companies offer this cost-cutting solution and going without insurance can leave you vulnerable to unnecessary out-of-pocket expenses.
One caveat is that this is a specialized coverage that you'll likely need to call around and inquire about, as most insurance companies do not offer online quotes for car storage insurance. For instance, GEICO is one carrier that offers this coverage as part of its Storage Protection Plan, which is geared towards military members set to serve overseas. However, to get this coverage, drivers must call to request it.