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If you're departing for an extended trip or your car is inoperable, you may not need to drive it for a while. In that case, you may wonder if you need insurance on a stored car.
You're not legally required to have insurance coverage on a vehicle that's not driven on public roads. If the vehicle is damaged or stolen, however, you'll have to cover the costs out of pocket if it's not insured.
Here's what you need to know about keeping insurance on a stored car and what to consider before dropping or reducing your coverage.
Do I Need Insurance for a Stored Car?
In most states, it's illegal to drive without liability insurance coverage. Without it, you wouldn't have the financial safety net insurance provides if you get in an accident or cause damage to another person's property with your vehicle.
If you're making payments on your car, your lender likely requires you to carry collision and comprehensive coverage until your car is paid off—even if your vehicle isn't being driven regularly.
There's no state law requiring insurance on stored vehicles that aren't driven on public roads. Dropping your collision and liability car insurance could significantly reduce your car insurance costs while your car is in storage. Still, it may be a good idea to carry comprehensive coverage in case your car is stolen, vandalized or sustains other damage while you're not driving it. Many insurance companies offer comprehensive-only coverage if your car will be kept in storage for at least 30 days.
Be aware that canceling your insurance altogether could create a coverage gap that might result in your insurance company placing you in a high-risk category. Consequently, you could face a premium increase when you reinstate your policy. Before canceling, talk to your insurance carrier to confirm what your premiums might be when reestablishing your policy, if it's an option to pause your coverage temporarily and whether they offer discounts for keeping your car in storage.
How to Decide Whether to Insure a Car That's Not Being Driven
Considering these factors may help you determine whether insuring your stored vehicle is a good idea:
- Consider your car's value and the potential risks of keeping it in storage. What is the likelihood your car could be vandalized, stolen, hit by another vehicle or damaged by a weather-related event? Keep in mind, the cost of repairs will usually be higher for newer and more expensive cars than older ones.
- Weigh your risk of theft or vehicle damage against the cost of insurance. If you're able to drop your liability and collision insurance while your car is in storage, your premiums could be significantly lower. Maintaining comprehensive coverage on your vehicle costs an average of $134 annually or a little over $11 per month, according to the Insurance Information Institute. This cost may pale in comparison to the cost of repairs or replacement if you need to file a claim.
- Consider your risk tolerance. If you're storing an expensive vehicle for a short time, carrying comprehensive insurance could offer you peace of mind while your car is in storage. Even if the odds of damage are low, you'll be grateful for insurance in the unlikely event of theft, fire or another unexpected incident. On the other hand, paying for coverage on a clunker you store indefinitely might not be worth it.
Registration Considerations for Stored Vehicles
If you plan on garaging your car for an extended period, you might consider registering it as "planned non-operation," or PNO, with your local department of motor vehicles. Doing so could save on registration renewal costs, but it's not advisable unless the car won't be driven for a long time.
That's because "planned non-operation," or registering your car as "non-op," means you don't plan on driving, parking or towing your vehicle on public roads and intend to garage it for the next renewal year. Consequently, you may avoid paying registration renewal fees.
If you plan on canceling your insurance, verify your state's requirements for cars in storage. Bear in mind, canceling your car registration before dropping your car insurance could help prevent a coverage gap.
If you plan to register your vehicle as non-op, contact your local DMV as soon as possible. Some states set time guidelines for PNO filings. For example, the California Department of Motor Vehicles requires vehicle owners to register for PNO status between 60 days before registration expires and 90 days afterward. Register for planned non-operation on your state DMV's website or by visiting a DMV office in person.
Find Affordable Car Insurance Premiums
If you own your car outright and your insurer permits it, you might consider pausing your insurance to save money while your car is in storage. Pausing insurance instead of canceling it may help you avoid a high-risk designation—and higher premiums upon reinstatement—by your insurer. Similarly, carrying comprehensive-only coverage could save money while providing a financial safety net in case your car is unexpectedly stolen or damaged while in storage.
If you're considering changing car insurers, Experian's car insurance tool lets you view and compare quotes from multiple insurance companies based on your current coverage. You may even qualify for a refund on premiums you've already paid with your insurance policy.