What does storage insurance cover on a vehicle?

7 minute read Published on Dec 23, 2023 by BrokerLink Communications

Generic yellow car parked in a garage of a luxury home

If you want to protect the vehicle that you store over the winter or even the car that’s parked in your garage overnight, vehicle storage insurance is important. Storage insurance is a type of car insurance that you can purchase to safeguard a car in storage against a wide range of risks. Continue reading to find out more about how storage insurance can cover your vehicle.

Vehicle storage insurance coverage

Vehicle storage insurance is not an official type of policy that you can purchase from a car insurance company. However, you can work with an insurance broker to create a policy that allows you to protect a car that’s in storage, such as by adding comprehensive car coverage to an existing policy.

Comprehensive coverage, which we outline in greater detail below, is one of the most important types of coverage for parked or stored vehicles. If a vehicle isn’t in use at all, you might also be able to amend or modify your car insurance plan by temporarily reducing certain types of mandatory coverage, such as third party liability car insurance.

However, not all insurance companies and leasing companies will allow you to do this, especially given that car insurance is a legal requirement in many Canadian provinces.

Thus, you might still be required to maintain a basic car insurance plan that meets the minimum coverage requirements in your province, in addition to adding comprehensive coverage to your plan. Below, we outline what your vehicle storage insurance policy may cover:

Third party liability coverage

The first type of coverage that vehicle storage insurance will include is liability car insurance. This type of car insurance is required in many provinces and it protects you if you cause a car accident.

For example, suppose you get into a collision that results in property damage or bodily injury. In that case, the liability coverage portion of your policy can reimburse you for the cost of medical bills, legal fees, vehicle repair bills, and more. Ontario drivers are required to carry at least $200,000 in third party liability coverage at all times.

Therefore, if you can reduce your coverage while your vehicle is in storage, you will probably still need to maintain at least $200,000 in third party liability coverage.

Accident benefits coverage

Accident benefits coverage is another mandatory coverage type that you may be required to maintain, even when your car is in storage. This type of coverage applies if someone is injured or perishes in a car accident, whether it is the policyholder or someone else involved in the accident.

Accident benefits can pay for a wide range of costs relating to the accident, such as funeral fees, lost income, and medical bills for physical therapy, rehabilitation, prescription medications, etc.

Direct compensation - property damage coverage

Direct compensation - property damage coverage is mandatory in many Canadian provinces, such as Ontario. With this type of coverage, you can receive a direct payout from your insurance company if you get into an accident that damages your car, so long as you were not responsible for the accident.

Uninsured automobile coverage

Uninsured automobile insurance is another type of auto insurance that is mandatory in some provinces and, therefore, may be required when purchasing vehicle storage insurance. This coverage protects you if you get into an accident with an underinsured or uninsured driver, or a driver who is anonymous because they illegally flee the scene of the accident.

Collision coverage

Your vehicle storage insurance policy may also have to include collision car coverage - not because it is mandatory in Canada but because your leasing or financing company may require it. If you lease or finance your vehicle, there may be a clause in your lease or finance agreement that stipulates you must maintain certain types of coverage on your car until the lease is up.

Even if you decided to put your car in storage for part of the year, you would be required to have valid collision coverage during this time. Collision coverage is a type of coverage that can pay to repair or replace your vehicle if it suffers extensive damage in a major accident.

Comprehensive coverage

Comprehensive coverage, like collision coverage, is typically optional unless you lease or finance your vehicle. That said, even if you own your vehicle, comprehensive coverage is one of the most important types of auto coverage to add to a storage insurance plan.

Also known as parked car insurance, comprehensive coverage is the only type of coverage that will protect your car from a wide range of losses or damages while parked. The other types of coverage on this list protect against collision-related incidents, but not comprehensive coverage.

If your vehicle was stolen while in storage or suffered damage due to a fire, comprehensive coverage is the only type of coverage that would protect you. Other perils that comprehensive coverage may protect against include theft, vandalism, falling or flying objects, wind, hail, water damage, and fire. It’s worth noting that home insurance would be unlikely to protect your car from losses, even if you chose to store your vehicle somewhere on your property, such as in your garage.

This is because more home insurance plans do not cover vehicles. You would need to add a rider or endorsement to your plan if you wanted your car to be protected. That is why most people prefer to purchase storage insurance for their car instead of relying on home insurance.

Optional coverage for stored vehicles

It is important to note that although there are several other types of optional coverage available to drivers in Canada, such as accident forgiveness or loss of use coverage, these are not commonly included in vehicle storage insurance policies. This is because drivers storing their vehicles usually want to minimize their car insurance coverage. Since these extra coverages are optional, they may be the first to go.

Comprehensive coverage and storage insurance

As mentioned above, comprehensive coverage is perhaps one of the most important types of car insurance that you will need if you are storing your vehicle. Comprehensive coverage is designed to protect cars from non-collision-related events.

For instance, if someone smashed your window and broke into your car to steal your steering wheel, comprehensive coverage might cover you. The same goes for if a thief stole your car from your garage in the middle of the night or a hailstorm resulted in a cracked windshield for your car that was parked in the driveway.

As you can see, comprehensive coverage is a very important type of car insurance in Toronto and throughout the rest of Canada, especially for those who are storing their cars for long periods of time.

Although comprehensive coverage can protect stored cars against everything from falling tree branches to fires, it does have its limits.

A few risks that comprehensive insurance does not provide coverage for include the theft of personal belongings from your car and the theft of your car by someone in your own household.

If someone broke into your car and stole your wallet or smartphone, or if a member of your family stole your vehicle, your comprehensive insurance coverage would not protect you. In addition, since comprehensive coverage specifically covers non-collision-related damage, this portion of your policy would not cover you if your car was damaged in an accident.

Instead, one of the other types of coverage on your policy would apply, such as third party liability coverage or direct compensation - property damage coverage.

Steps to buying storage insurance coverage for your vehicle

If you are ready to buy storage insurance coverage for your vehicle, follow the steps below:

1. Reach out to your insurance broker

Contacting your insurance broker is the first step you should take if you want to buy storage insurance. An insurance broker can inform you about how storage insurance works in your province, including what the minimum amount of coverage you are required to maintain on your car is. From there, they can explain what types of coverage might be worth adding or keeping, such as comprehensive coverage, and shop around for you to ensure you get the best rate for your policy.

2. Amend your existing policy

If you already have an existing car insurance plan, then you may need to amend your policy to suit the fact that your car is going to be in storage for the next little while. The ways that you can modify your policy may be limited, as insurance companies typically have several restrictions. That said, there are probably small changes you can make, at the very least, such as reducing the amount of third party liability coverage in your policy or adding extra coverage, like comprehensive coverage to your policy. When amending an existing car insurance plan, make sure to review any contractual obligations you may have. For instance, if you lease or finance your car, you should review the conditions listed in your leasing or financing agreement to ensure that you are not in violation of any contractual obligations or clauses if you adjust your coverage.

3. Get in touch with your insurance provider before you start driving again

Once you know when you plan to take your car out of storage and start driving again, you should contact your insurance provider. Given that car insurance is mandatory in Canada, you cannot drive without it. Thus, it’s best to give your insurance provider plenty of notice so that they can restart your coverage on the correct day. A reminder that if you choose to drive without car insurance in Canada, you can face serious penalties, such as fines, the impoundment of your vehicle, the suspension of your driver’s licence, and even jail time.

Find out more about how vehicle storage insurance coverage works by contacting BrokerLink

If you want to learn more about how storage insurance covers vehicles in Canada, contact BrokerLink. One of our licensed insurance advisors can walk you through exactly how each type of storage insurance coverage can safeguard your vehicle. We can also outline the benefits and importance of adding comprehensive coverage to your storage insurance policy.

At the end of the day, the BrokerLink team is always available to help you purchase a car insurance plan, whether you’re looking for first time car insurance, seniors car insurance, or even vehicle storage insurance. Even better, we will help you keep your rates as low as possible by offering advice and informing you about discounts you may not have even known existed. For example, if you need to insure more than one car in your household, buying multiple auto insurance policies can result in a major discount. For more information on how much car insurance costs per month in Ontario or to request a free auto insurance quote, contact BrokerLink today.

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