Do I Need Liability Insurance for an Unused Car in Storage?

Most people drive their cars. That's why you buy a vehicle, right? But what if you are holding on to a car for sentimental reasons and not for the purpose of transportation? Or maybe you collect classic cars that never leave your storage facility? You might be wondering if you need liability insurance for an unused car in storage.

Registered cars usually must be insured.

An unused car does not necessarily have to carry liability insurance, but it's important you follow the laws of your state. Most states, such as Florida, require that you carry minimum liability coverage on any car that is registered, whether it is in storage or not. So if you update the registration on your vehicle, you need to carry liability insurance.

It might seem easy to drop the registration, and therefore the liability insurance coverage, but make sure you can actually put your car in storage first. If you live in an apartment complex or condominium, for example, the property managers will probably not let you park your unused car in the lot. If it isn't registered (and, in most cases, inspected), they will tow your vehicle.

It can be difficult to put an unused car in storage.

To have an unregistered, uninsured, unused car in your possession, you need to store it on private property. Your garage will work if you own your home, as well a large storage facility. Keep in mind that the bylaws of many home owner's associations will not allow you to park an unregistered car in your driveway or on the street.

Look for Pay-As-You-Go Insurance

According to Grist magazine, there are alternatives for those who want to save money on liability insurance for an unused car in storage. Mileage-based insurance can bring down the premiums on any vehicle and reduce your overall expenses. If you only bring out your classic car for auto shows, for example, you might want to buy mileage-based insurance to cover those events. During months when the car isn't driven, your costs come down.

But Pay-As-You-Drive (PAYD) insurance has not yet permeated the market and may be difficult to come by. The alternative, of course, is to stop driving the car entirely, allow the registration to lapse (or surrender registration at the court house), and cancel your liability insurance policy. There is no reason to pay for an unused car in storage.

Get a waiver.

If you live in a state where it is difficult to cancel registration, you might be able to get an exception for an unused car that is also inoperable. The DMV can issue a waiver for liability insurance, and although the waiver will expire, you won't have to carry insurance during that time period.