Yes, you need insurance for a stored car, as laws require that all registered cars have insurance coverage. Although it might seem like cancelling coverage for a stored vehicle could save you money, doing so could actually create costly long-term problems.
Reasons To Insure A Stored Car
Having insurance for a stored car helps you avoid creating gaps in your coverage history. Drivers who have gaps in their insurance history are considered to be higher risk, and as a result, are quoted higher premiums.
Insuring your stored vehicle will also ensure that the vehicle is protected in case of theft or damage during the time it is stowed away. For example, if the car is damaged due to a flood and you have comprehensive insurance, it would help pay for those damages.
Cars that are purchased with a loan or leased are required to have insurance at all times, and cancelling, even if the car is in storage, could violate the terms of the financing agreement.
Many insurance companies offer discounted rates if you can prove that your car is being stored.
Car storage insurance is a term that is used to describe comprehensive insurance coverage. If you are not planning to drive that car for a month or longer, you should consider keeping only comprehensive coverage. This coverage would protect the car in case of damage or theft, maintain your insurance history and allow you to save some money. Dropping liability coverage usually decreases your premium.
On the other hand, if the car you’re storing happens to be a classic car, you might be able to get discounted insurance. Policies for classic cars usually place restrictions on where and how much the car can be driven, but they do provide savings on the cost of coverage.
Most states require every registered car to have insurance, so the answer is yes. You need car insurance on a car that doesn’t run. This means that you’ll either need to find cheap coverage or consider canceling your registration for a car that doesn’t run.
Canceling insurance coverage on a broken-down car can cause your license plate to become invalidated, making it harder to obtain auto insurance on any car in the future. Even worse, canceling your insurance before the registration will result in a gap in your insurance history that can lead to higher premiums later on.… read full answer
How to Reduce Insurance Costs for a Broken-Down Car
Some insurance policies offer comprehensive insurance on vehicles that don’t run. This coverage is usually cheaper than standard insurance, and it will protect your car from theft or damage, such as from a fallen tree. However, if you get the car running again, you will not be able to drive it with just “comp” insurance. Rather, you will have to obtain your state’s minimum required insurance coverage in order to avoid breaking laws.
Some insurance companies allow drivers to suspend their insurance coverage for a period of time. This does not cancel your policy, but it does mean you will not be covered from any theft or damage that occurs while your policy is suspended.
You might consider purchasing storage insurance from your carrier. Storage coverage usually comes with conditions – ensuring your car is parked in a garage or storage unit, for example. Purchasing this policy will allow you to avoid lapses in your coverage. However, if you decide to repair the stored car, you will need to obtain your state’s required minimum insurance coverage before you can legally drive it again.
Paying insurance for a broken-down car might still be costly and not the best decision for your current budget. In that case, you might consider canceling that car’s registration. If you cancel the registration, you will no longer legally be required to carry insurance on that vehicle. Canceling the registration first will ensure that you follow all applicable laws and do not create a gap in your insurance coverage.
Canceling your insurance coverage entirely can be a costly decision. Typically, this would create a lapse in your insurance history, and obtaining coverage after you repair your broken down car or purchase a new car might cost more. If you decide to cancel your coverage, it is a good idea to first cancel the car’s registration, in order to avoid breaking the laws in your state, invalidating the license plate and creating a gap in your insurance history.
If you own only one car and that car stops running, your cheapest option might be to maintain some form of insurance coverage while you search for a new car or make repairs. As always, it is a good idea to check with several insurance providers in your area to better understand your options.
No, it’s not bad to switch car insurance companies often. Switching insurers can be a great way to save on your car insurance premium, though it’s important to remember that you may be charged cancellation fees each time you switch companies mid-policy.
Progressive, Travelers, and Liberty Mutual are the only companies among the 10 largest insurers that charge cancellation fees, though smaller companies like … read full answerAAA and Auto-Owners also have fees. If your insurance company charges a cancellation fee, then it’s probably best to wait until it’s time to renew your policy to switch insurers.
If you decide that you want to switch insurance companies mid-policy, you need to contact your current insurer and let them know instead of simply not paying your premium. Even if you paid for your policy in full up front, you should still officially cancel the policy so that you can get a prorated refund.
Older cars are cheaper to insure than newer cars, all else being equal. An older vehicle is cheaper to insure mainly because older cars are less valuable, so an insurer won’t have to pay out as much in the event of a total loss. Plus, once the car falls below a certain value, comprehensive and collision coverages to protect the car itself will actually cost more than they’re worth. You can drop these parts of your insurance altogether and save money.… read full answer
But a car’s age actually has less of an impact on insurance premiums than its make and model. If your older car is a popular model with thieves, has hard-to-find replacement parts, or is a luxury car or high-end sportscar, it could cost more to insure than a brand-new car of a different make and model.
When your car is at a higher risk of being stolen, your premiums are likely to be higher, too. You may think that thieves love flashy sportscars, but many older cars are stolen to be dismantled for parts. Popular targets are chosen because their parts haven’t changed much over the years or because so many of them are still on the road.
Top 5 Most Stolen Used Cars (More Expensive to Insure)
1998 Honda Civic (1998)
1997 Honda Accord (1997)
2006 Ford F-150 (2006)
2004 Chevrolet Silverado
2017 Toyota Camry
There are other reasons an older car could be more expensive to insure. For instance, parts can become hard to find for discontinued makers, like Saab, or less popular models. Trouble finding replacement parts drives up repair costs. That increases the price of insuring a vehicle.
So, in general, older cars are cheaper to insure. But if your older car is one of the special cases with higher insurance costs, shop around for the best price. Not all insurance companies treat all older cars the same.
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