What is Car Storage Insurance?

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What is parked car insurance?


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 a long 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 to cancel your registration and drop your coverage completely. Let's examine the options.


How to insure a vehicle you’re not driving
  1. What is storage insurance?
  2. Can you legally park a car long-term without insurance?
  3. If someone hits your parked car
  4. How to get car insurance for a stored car
  5. Additional resources




What is car storage insurance?


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:

  • Vandalism
  • Theft
  • Hail/lightning
  • Damage caused by animals
  • Damage caused by weather

The idea of storage coverage is to keep your vehicle parked in one place, ideally in a locked garage and off the street. This coverage is 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 carry at least minimum liability insurance. If you drop this 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 insure another vehicle to meet your state’s minimum liability requirements.




Do you need to insure a parked vehicle?


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:

  • $30,000 of bodily injury protection per person
  • $60,000 of bodily injury protection per accident
  • $25,000 of property damage protection per accident

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.




What happens to insurance when someone hits your parked car


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’s a couple of reasons for this:

  1. This coverage is designed to be cost-efficient. By keeping collision insurance or uninsured motorist coverage on the insurance policy, you would save significantly less.
  2. By removing your liability coverage, you’re not legally allowed to park your vehicle on a public road. If your vehicle is secured, as it should be by the policy stipulations, it’s very unlikely it will be hit by another vehicle.

If someone does hit your vehicle but they have insurance, you would file a claim under their liability property damage coverage.





How to get parked car insurance


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. Still, here is a simplified step-by-step process for getting car insurance on a parked vehicle.

  1. Have an established policy with a "fully" insured vehicle: Usually, you will need a vehicle that is insured to at least your state's liability limits in order to drop another vehicle's coverage down.
  2. The vehicle needs to be owned. You will not be able to drop your coverage to "storage" if you're leasing or financing the vehicle, as you will be in violation of your lease agreement. Because you do not technically own a leased or financed vehicle and another entity does, you're required to keep the vehicle insured.
  3. Cancel your registration. While some states do not actively monitor registration requirements, the majority do. If you do not cancel your registration but drop your liability coverage, you risk being fined.

If your current insurance company does not offer parked car insurance, consider that as an opportunity to shop around for quotes. Many companies offer this cost-cutting solution and going without insurance can leave you vulnerable to unnecessary out-of-pocket expenses.




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Additional resources


If you’re looking for more information on auto insurance for an active or parked car, see our related articles below: