Do I Need Liability Insurance on a Car in Storage?

Jodee Redmond
Corrugated garage doors

The answer to the question, "Do I need liability insurance on a car in storage?" is one that people who may not drive their vehicles throughout the year need to clearly understand. Failing to keep proper insurance in place on a vehicle can lead to serious and expensive consequences for the owner.

Liability Insurance Overview

In most parts of the United States, vehicle owners are required to have liability insurance in place. This type of coverage protects the occupants of the other vehicle and property owners if an accident occurs.

Bodily injury liability insurance compensates people who have been injured in an accident. It pays for medical bills as well as expenses incurred as a result of the accident. For example, if the injured person needs rehabilitation or homemaking services, this coverage would cover the cost. Liability insurance also provides compensation for lost wages and may pay for funeral expenses in the case of a fatal accident. Property damage liability insurance pays for the cost of repairing or replacing the other driver's vehicle. It also covers damage to fences, sign posts, mail boxes, or buildings as a result of the accident.

Do I Need Liability Insurance on a Car in Storage

Depending on the state where you live, you may need to maintain liability insurance on your vehicle even when you don't intend to drive it for some time. In some parts of the United States, all registered vehicles must have liability insurance in place. The fact that they are not currently on the road doesn't matter.

Motor Vehicle Registration Requirements

Check with the Department of Motor Vehicles (DMV) for your state to find out about registration requirements. You may be able to get away with not keeping the car registered if it is being kept in a secure location, such as a locked garage. If you keep the car in your driveway or park it on the street, you will probably need to keep the registration on it current.

In a situation where you don't need to keep the car registered, the DMV may require that you turn in the license plates. If you decide later on that you want to drive the car, you will need to go to the DMV to reactivate the registration and get your plates back before you can get behind the wheel again.

Storage Coverage

Some insurers will offer special coverage for vehicles that will be stored for some time or for cars that are only driven a few times a year. Customers who own classic cars or other special cars could benefit from this protection. Your insurance company or agent can provide you with information about policy provisions and pricing.

Penalties for Not Insuring Registered Vehicles

In jurisdictions where all registered vehicles must be insured, failure to have coverage in place -even on a car that is in storage- means you will face some harsh penalties. The DMV may suspend your license and vehicle registration. You may be required to provide proof of insurance to have your license and vehicle registration reinstated, and the DMV may also make you pay a fee for the privilege. The amount charged will depend on the policies set by the state.

Letting your car insurance lapse may mean that it is more challenging to find an insurance company willing to offer you coverage. You will be considered a higher risk to insure than someone who has kept his or her coverage current on a continuous basis. As a result, you have to pay more for your coverage.

A better choice is to contact the local office of your state's DMV to find out what the requirements are for your area. The staff there can answer the question of, "Do I need liability insurance on a car in storage?" for you. If it turns out that you need to have insurance in place, you can consider getting a no-frills policy with only the minimum amount of liability coverage required by state law.

Do I Need Liability Insurance on a Car in Storage?