Insuring a stored car: storage coverage, plates and lender rules

What "storage insurance" usually means

There is no single product called storage insurance. People use the term for a policy cut down to fit a car that won't be driven for a while. The usual setup keeps comprehensive coverage and removes or suspends the rest.

The Texas Department of Insurance (TDI) describes the suspension option in its guide for servicemembers: to suspend liability coverage, you must store the car so no one else can drive it. Because you still have a policy, you won't have a lapse, but you can't file claims on the policy while it is suspended. TDI also notes that if you cancel or suspend coverage and the car is stolen or damaged in storage, you will probably pay for repairs yourself.

What comprehensive covers while a car is stored

Comprehensive covers damage that doesn't come from a collision. TDI lists fire, hail, theft, flood, flying gravel and hitting an animal as examples. For a stored car, the most relevant risks are theft, vandalism, fire, storms, flooding and damage from animals.

Comprehensive does not cover the car if someone drives it and crashes, and it doesn't pay for injuries or damage to other people. That is liability coverage, which is why the car must stay off the road. TDI notes that both collision and comprehensive might pay if the car is damaged in storage, so ask your insurer how each applies.

Two practical points:

• Your deductible still applies. A stored car may be a good time to rethink it. Our deductible chooser shows the trade-off between deductible and premium.
• Value matters. On an older car, comprehensive may cost more than it is likely to pay. For a collector car, ask about agreed-value coverage; see our post on classic car insurance.

The registration catch: liability while the car is registered

Many states tie the insurance requirement to the registration, not to whether the car is driven. California's DMV is explicit that comprehensive or collision insurance does not meet the state's financial responsibility requirement. So if you drop liability while the plates are active, you may create a lapse, even though the car never moves.

New York says coverage must remain in effect while the registration is valid, even if you don't use the vehicle. Florida requires continuous coverage even if the vehicle is not being driven or is inoperable. In both states, the legal way to drop liability is to give up the plates first.

The penalties for getting the order wrong can be steep. Florida can suspend a license and plate for up to 3 years, with reinstatement fees of up to $500. See car insurance lapse for more state examples.

State examples: plate surrender and non-operation status

New York

New York's DMV says that if you have no liability insurance, you must surrender your plates immediately, and that if coverage is about to end and you won't replace it, you should surrender the plates before the lapse. When you want to drive again, you'll need new insurance and a new or reinstated registration.

North Carolina

NCDMV says an owner storing a vehicle long-term should return the plate before canceling liability insurance. Canceling first leads to a fine for failing to keep continuous coverage. Receipts are given only at plate agencies or by mail, so keep proof of the date you turned the plate in.

Florida

Florida requires at least $10,000 of personal injury protection and $10,000 of property damage liability on every vehicle with a current registration. FLHSMV's instruction is to surrender the plate before canceling insurance. Servicemembers stationed outside Florida may be exempt; check FLHSMV's military page.

Virginia

Virginia lets you temporarily deactivate your plates and registration when you need to cancel liability insurance but want to keep the plates. The DMV warns not to cancel insurance until deactivation is complete. To drive again, you reactivate with proof of insurance and pay a $10 fee if the registration hasn't expired. Permanent surrender is a separate process.

California

California offers two tools. If the car is currently registered, an Affidavit of Non-Use tells the DMV the car is off the road and liability coverage was canceled, which prevents a registration suspension. At renewal time, Planned Nonoperation (PNO) status means the car won't be driven, towed, stored or parked on public roads for the registration year. The DMV accepts PNO filings up to 60 days before the registration expires, or up to 90 days after with penalties. If the car is driven or parked where it could be ticketed, full fees and penalties for that year become due. Without one of these, a suspended registration costs a $14 reinstatement fee plus proof of insurance to clear.

Lender and lease requirements

If you still owe money on the car, the lender has a say. TDI notes that lenders usually require you to keep collision and comprehensive coverage, even on a stored car. The NAIC adds that the lender is listed as loss payee on your declarations page.

If you drop coverage the loan requires, the Consumer Financial Protection Bureau (CFPB) explains that the contract usually lets the lender buy force-placed insurance on the car. That coverage protects only the lender, and the CFPB says it is usually much more expensive than a policy you buy yourself. Lease agreements can have similar terms. Read your loan or lease agreement, and ask the lienholder in writing before you change anything. If you owe more than the car is worth, also see gap insurance.

Lapses, rates and getting back on the road

Canceling all coverage saves money in the short run but can cost more later. TDI says companies may charge higher rates if you've had coverage lapses longer than 30 days, and that a lapse can make insurance harder to get. Keeping comprehensive, or suspending a policy rather than canceling it, keeps your history continuous.

Before you drive again:

1. Restore liability and any other coverage you removed, and confirm the start date.
2. Reactivate or replace the plates and registration as your state requires.
3. Add collision coverage back if you want it, or if a lender requires it.

Storing a car during military deployment

If you are deploying, TDI's guide for servicemembers explains how suspending coverage works and how to avoid a lapse. Other protections for servicemembers, such as limits on interest rates and on enforcing storage liens, are covered in our guide to car insurance for military members.

How to put a car in storage without a lapse

1. Check your loan or lease. If you owe money on the car, ask the lender what coverage you must keep.
2. Call your insurer. Ask whether it offers comprehensive-only or suspended coverage, what it costs and how to restart it.
3. Check your state's registration rule. Find out whether you must surrender plates, deactivate them or file a non-operation status before dropping liability.
4. Handle the plates first. Surrender, deactivate or file the status, and keep the receipt or confirmation.
5. Then change the policy. Reduce to comprehensive only, or suspend, effective after the plate step is complete.
6. Store the car off public roads. A garage, driveway or storage unit; parking on the street can break non-operation rules.
7. Set a reminder to restart coverage. Restore liability before the car moves again. Our coverage checklist and guide to reviewing your coverage help you rebuild the right policy.