Things To Consider Before Removing A Vehicle From Your Auto Insurance Policy Because You're Storing It For The Winter
If you own a vehicle that you put in storage throughout the winter, you might be wondering if you should remove the vehicle from your auto insurance policy once it's in storage. After all, it's reasonable to assume that if you aren't driving the vehicle, you won't need to maintain auto insurance for it. However, removing a vehicle from your insurance policy for several months isn't just as simple as calling your insurance company and having it deleted from your policy. Before you make any changes to the vehicle's insurance coverage, there are several different factors that you need to take into consideration.
Vehicle Registration
Many states require owners to maintain at least a minimum amount of liability coverage on any vehicles that have a current registration. This means, to remove a stored vehicle from your auto insurance policy for the winter, you also have to relinquish the vehicle's registration for the season. When you discontinue liability coverage on a vehicle, insurance companies automatically report the policy change to the state's motor vehicle department. Many states require owners to submit proof of new insurance coverage any time they are notified that a currently registered vehicle has been removed from an insurance policy. If you can't provide proof of consistent coverage, you could be charged additional fees and, in some states, face license suspension. So, to determine whether or not it's beneficial to remove the vehicle from your insurance policy completely, you need to determine how much you're paying to insure the vehicle for the months that's it's in storage and compare that amount to how much it will cost you to re-register the vehicle once winter is over. It might be more cost effective to lower the amount of coverage on the vehicle than it is to remove it from your policy completely.
Leinholders
If you are storing a car that you're currently still paying off, the lienholder probably requires you to maintain specific coverage — most likely comprehensive and collision coverage. When you remove comprehensive and collision coverage from an insured vehicle, any lienholders listed for that vehicle are notified of the change. In many cases, if a lender receives notification that comprehensive and collision coverage have been removed from a vehicle that they have a financial interest in and the borrower cannot provide proof of new insurance, additional fees to insure the vehicle are added to the total loan amount. So, before making any coverage changes to a vehicle that you're still making payments on, you need to check the terms of your loan with the lender. If you can't remove the coverage completely, you can save money by increasing the deductible to the maximum amount allowed by the lender while the vehicle is in storage.
Comprehensive Coverage
If you are storing a vehicle that you own outright and you've cancelled the vehicle's registration — or verified with your state's motor vehicle department that you can remove liability coverage temporarily without facing penalties — you still may not want to remove your auto insurance coverage completely. Some insurance companies allow vehicles that are in storage for specific periods of time to maintain comprehensive insurance only. This ensures your vehicle is covered in the event of damage that is beyond your control, such as theft, vandalism, or fire. This coverage isn't typically expensive, so it's an option that you should consider keeping any time you put a vehicle in storage.
Many people assume that removing a vehicle from their auto insurance policy while it's stored for the winter will save them money. However, that isn't always the case. Before making any changes to your policy, take the time to discuss all of your options with an auto insurance agent, such as those found at Able Insurance Agency.
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