Question: Two years ago I put my inoperable car in storage and acquired a new vehicle. I am finally getting around to fixing my stored vehicle and realized that I failed to stop car insurance on it and thus paid plenty in premiums for a car that wasn’t being used. Is any of that money recoverable?
Answer: We hate to be the bearer of bad news, but it’s very doubtful that your car insurance company will reimburse you the cost of insuring your inoperable vehicle for the past two years.
Your auto insurance provider has no way of actually knowing if you used the vehicle or not during the time you say it was out of service. Your auto insurer will assume that since you’re the owner of the car that you would’ve had access to it and could’ve used it in the last two years but now may be asking for your money back just because you didn’t make any claims.
On the other hand, if you failed to remove a car from your car insurance policy after selling it or junking it, then it may have been possible to receive reimbursement for the premiums you had paid out after showing proof of the date the car was no longer yours. (See "Insure your car from showroom to junkyard.")
Your situation is a good reminder that it’s important to look over your car insurance declarations page at each and every renewal. If you did so, then you should have caught early on that you were still paying for the unused vehicle.
When you have a car you aren’t using, you need to contact your car insurance company immediately to find out your options. Depending upon your state laws and your insurer’s offerings, your choices may include removing the car from your policy completely, keeping the car listed on the policy but suspending its coverage, or placing storage coverage on the car.
Some insurance companies offer storage coverage that includes just comprehensive coverage so that if your vehicle is protected if damaged by a fire, theft, flood waters or other natural disaster (such as a tree falling on the garage where it is stored) while it’s stored away and not driven.
Remember though, before taking car insurance off of any vehicle you need to own it outright and take registration off of it. If you have a leased or financed vehicle, then you will be required to have liability as well as collision and comprehensive on it – even if you aren’t using the vehicle. (See "Can I drop insurance if the car is stored?")
Also, most states mandate that you have at least state-minimum liability insurance on a vehicle as long as it’s registered. To take insurance off a car for any reason, you need to turn in your registration and tags. In some states, like California, you can apply for a planned non-operation (PNO) option for your registration. This will allow you to suspend registration and insurance on a vehicle until you use it again.
You can speak to your insurance company now about taking insurance off of your inoperable car until it’s repaired. Once the car is again operable, you will need to place insurance and registration back on it. That will also be a good time to comparison shop for the cheapest auto insurance rates for all of your household vehicles. (See “12 ways to double-check your savings”)