The federal government requires all motorists in the United States except New Hampshire to carry some form of auto liability insurance coverage. Different auto insurance policies cover different risks, such as third-party liability claims, your medical bills, uninsured motorists, and the costs of repairing or replacing your car in the event of an accident. It is worth noting that auto insurance is particularly useful when your car is on the road. However, even a car in storage is susceptible to various risks, including, among others, theft and fire. Read on to find out whether or not you need to insure a car that’s in storage.
Is Auto Insurance Necessary for a Car in Storage?
The simple answer is yes. Just because your car is not on the road does not mean that it is safe. To give you an idea, State Farm paid a whopping $3.1 billion worth of hail claims in 2020, some of which involved auto insurance, according to the Insurance Information Institute (III). This shows that despite being in storage, your car can still face perils such as hail, earthquakes, floods, fire, theft, and vandalism. With this in mind, consider keeping your car insured even when in storage.
Why You Should Not Cancel Coverage for Your Stored Car
While it’s your choice to cancel or retain your car insurance coverage when you keep your car in storage, experts advise against canceling it. That said, here’s a look at some of the repercussions of canceling insurance for a car in storage.
- Creates costly gaps in coverage – In case you have a gap in your auto insurance coverage, most insurance providers will typically consider you irresponsible and high risk. As such, you will likely pay higher auto insurance premiums when you purchase new coverage.
- Expensive costs of repairs in case of damage – As mentioned earlier, a car in storage is prone to certain risks. Unfortunately, without car insurance, any damage to your car in storage will directly harm your finances. More specifically, you will have to pay for all repair costs out of pocket, something you can avoid by retaining your car insurance policy.
- Violation of policy requirements – If you’re servicing a loan on your car, it may even be impossible to cancel the car insurance policy considering this could violate the terms of the loan.
Comprehensive Coverage for a Car in Storage
Considering the relatively high cost of living in the U.S., it is prudent to save on your auto insurance coverage any chance you get. Since canceling insurance for your stored car is not a good option, consider reducing the coverage instead. Moreover, if you intend to keep your car in storage for at least a month, you can cancel all driving-related coverages such as uninsured motorists, collision coverage, medical and liability coverages. However, make sure to retain your comprehensive coverage because it will cover the costs of repair in case of theft, vandalism, hail, and other perils that may damage your car while in storage. By retaining comprehensive coverage and canceling driving-related ones, you will lower your auto insurance costs for some time without creating a gap in your car insurance history or jeopardizing the safety of your car.
It is worth noting that comprehensive coverage is still necessary for cars in storage. Talk to the experts at Sausman Insurance Agency for help finding reliable auto insurance coverage. We serve Mifflintown, Millersburg, and beyond with quality policies. We are ready to assist you in securing reliable and comprehensive coverage that suits your needs and budget.