Keeping an Unused Vehicle Insured

Dave is an Army MP who’s been assigned to a two-year stint at a military base in Germany. Being a career military man his family is allowed to come with him overseas. But that leaves some things at home that need to be dealt with, not the least of which is the family van and Dave’s pickup truck. Neither of the vehicles will be used while they’re away. So, do they need to keep them insured?

With a few possible exceptions, most states require drivers to keep insurance valid on any vehicle registered in the state. Using New York as an example, in order to get a registration a driver is required to furnish proof of a liability insurance policy in force. That policy can be the cheapest car insurance available with very limited coverage, as long as there’s something in place. If Dave were living in New York he would either have to maintain his liability policy or surrender the registration and plates of both vehicles to the DMV.

On the other hand, the state of Arizona offers an option known as “de-insuring” a vehicle that is inoperable. An in operable vehicle is defined as one that is not driven on the public roads due to ongoing repairs, restoration, or storage. Dave could keep his registration and plates in Arizona simply by filing a de-insurance affidavit stating his cars will both be in storage during his two years in Germany. When he returns he simply purchases a new policy and informs the state.

Other Options Available

If your state is not one that allows the de-insurance option you need to look at other things. One of the best options is to look for an affordable insurance policy for stored vehicles. These types of policies are usually reserved for owners of classic cars who might keep them stored away in a collection and never drive them on the roads. This type of policy would be beneficial to someone like Dave if he could find a car insurance company willing to provide it for him.

The second option is to discuss the situation with your current car insurance provider. Once they realize a car will not be driven for an extended period of time they might be willing to reclassify it as an “occasional use” vehicle, thus reducing how much you pay on it. Insurance companies are not obligated to provide you with such options. But many of them do. So ask about it; you never know what you’ll come up with once you start digging.

Consequences of Not Taking Care of Business

If Dave lived in the state as strict as New York, not taking care of business before leaving for Germany could cause him a lot of headaches. New York State would immediately suspend Dave’s registration on notice that he allowed his insurance policy to lapse. They don’t care about the fact that he’s in another country for the next two years. When he finally does return he’d have to pay a series of fines and reinstatement fees in order to get his license back. But his vehicles won’t be able to be re-registered for at least a year after Dave settles up.

It’s unfortunate that some states don’t take into consideration circumstances like those we describe here. But that’s the reality. So if you live in one of those highly restrictive states you have to be willing to either keep your car insurance policy in force or surrender your registration and plates. Yes, it’s a hassle. But the consequences of not doing so could be that much worse.

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