Do I Need Auto Storage Insurance?

If you're wondering if you need auto storage insurance, there are several factors to consider. Your state may require it, or your loan terms might state that continual comprehensive and collision insurance are non-negotiable. Here are some factors to consider.

Save Money By Avoiding a Lapse in Coverage

If you're storing your car, it might seem pointless to pay for insurance on it. However, Esurance suggests that you continue to pay insurance on the car in order to maintain your policy. That's because once you cancel and have a lapse in coverage, your new policy could cost considerably more. This is because a lapse in continual coverage can bump you into a "high risk" category. In order to avoid losing money in the long run, it could be cheaper to pay for storage insurance if you're eligible.

Insurance May Be Required

If you still owe money on your car and are making car payments, car insurance may be required, according to Allstate. That means that even if you're not planning on using your car, you don't have the option of canceling your coverage.

While some people may be eligible for auto storage insurance options (which usually means paying just for comprehensive coverage), those with loans may have to pay for both comprehensive and collision coverage.

Auto Storage Insurance Options

Just because you've decided to continue paying on your car insurance while it's in storage doesn't mean you have to pay the same rate. For example, in many cases you can opt to pay just for comprehensive coverage while the car is being stored. Typically, this is only available if you're storing your vehicle for 30 days or longer.

Insurance for Seasonal Vehicles

If you have a car that's seasonal, like a convertible, it might not make sense to pay for regular insurance all year. Even for a car that you only use occasionally, insurance during storage is important in case something happens to the vehicle while it's being stored.

State Laws

Each state has different laws regarding auto storage insurance. One of the easiest resources to check for insurance laws is Geico's "Car Insurance Requirements and Laws by State." Simply choose your state from the drop-down menu to read a summary of your state's laws. If you have further questions, the best thing to do is to contact an insurance company or broker for clarification.

For example, in Texas, auto insurance policies have to be active before operating a car. If you choose to cancel your auto insurance without driving the car, you will still be held liable for damages that might occur while the car is in storage.

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