Winter Storage & Saving Money on Your Car Insurance
When people are not driving their cars, they sometimes think that it is a good idea to cancel their insurance and just buy new insurance when they decide to drive again. What most people don't know is that they don't need to cancel their policy to save money or get money back for the period the car is stored.
When is Storing A Vehicle A Good Plan?
If you have a "summer only" car, like a sports car for example.
Going out of the country to travel or work for several months, or for "Snow birds" in the winter months
If you prefer not to drive in harsh winter conditions
Don't Cancel Your Policy! Put it on "Hold."
Cancelling a policy is not a good idea when a car is in storage, here’s why
- It will cost you time and money: You will receive a penalty for cancelling your policy mid-term. You will also create a gap in your car insurance history and make the process much longer when you want to insure your vehicle again.
- When you cancel an insurance policy but still own the vehicle, you are still liable for the vehicle or any damage that may occur as a result of your ownership of the vehicle. A car does not have to be driven to cause damage!
- When you cancel a policy, you also cancel the coverage for physical damage to the vehicle. So if someone scrapes your car, does a hit and run, steals your car, etc. You will not be covered if you cancel your policy.
A Winter Storage endorsement is the best alternative to save money and protect your car.
In Quebec, we offer a winter storage endorsement QEF16/QEF17. In other provinces or places, there may be similar programs - please contact your insurer or broker to find out how you can save money or if there are similar programs available.*
The QEF 16 endorsement can be added at any time, and at the end of a storage period, it is ended based on your request, with a QEF 17. This endorsement allows for a reimbursement or reduction of the premium for the timeline where the vehicle will be off the road or not being driven. Depending on the insurance company, some may even issue the credit to you in advance.
The credit will normally be for the period between November 1st and April 1st, however, this varies by insurer, and of course, if you only put your car away from January to March, for example, it can be adjusted to your needs. The important part is always to remember that once you have advised your insurer a vehicle is in storage, your insurance is limited or suspended, and you are not insured to drive it again until you call your insurer to advise it will be going back on the road, and you need the full insurance back.
Most companies have a minimum amount of time a vehicle will be stored to qualify for the endorsement, this time frame is usually over 60 days.*
How does the Winter Storage Endorsement Work?
• It normally provides minimal coverage in liability. In other words, it takes into account that you will not be driving the vehicle. However, it maintains a portion of the liability coverage in place for situations where you might become liable for damage caused due to your ownership of the vehicle.
• It maintains comprehensive coverage. This is the coverage that protects you for damages that may occur as a result of fire, theft, vandalism, windshield, for example.
• Collision coverage may also be adjusted for the duration of the storage. Collision is the portion of automobile insurance that covers your car when you are responsible for an accident that results in damage to your vehicle – since you won't be driving; it stands to reason this coverage can be limited during the storage period.
Please contact your insurance representative to find out how you can save money while protecting your car during a storage period. You may be surprised to find out how much you can save!
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