I can’t believe that it’s almost that time of year again; how quickly the summer flew past. We had rain that we thought would never go away, counterbalanced by sunny days we thought would never end. And now, much too soon, summer has faded into fall and we get to look forward to the harsh, cold Canadian winter. Personally, I don’t understand why some people prefer winter but then again I’m a summer person. All of my toys and pastimes are really summer-related and in the winter I pretty much hibernate.
When I hibernate, so do some of my vehicles. It’s time to put away the summer sports car and motorcycle for the winter. This brings us to the perennial question of what to do with these vehicles. If you’re lucky enough to be able to store an unused vehicle in your own garage, you can at least escape paying someone else for a warm space for the season.
If you do decide to store your car for a period over 60 days, there are several insurance-related laws you should keep in mind. In the first place, if you store your car anywhere away from your house you must inform your insurance company of the place that is to be stored in. They may decide to charge you a special premium if the place you choose to store the car in is not as safe as in your home. If you neglect to tell them about the move and something happens, your car you may not be covered at all.
As with many insurance contracts, a telephone call to your broker may suffice but it is always better to send a written notice so that you’ll have proof that you did indeed advise the company of your decision.
In most cases, people decide to pull the insurance coverage for collisions while the car is in storage. In this way they get an almost immediate rebate from the insurance company for the premiums that they have paid for collision coverage which was based on coverage for an entire year. While on the face of it, it seems to be a good idea, but it does not always work to your entire benefit.
Let’s say that Mr. Smith decides to remove the collision coverage from a car that he’s storing for the winter. Since he does not have an extra garage at home, he arranges to store the car in a friend’s garage. His friend is doing him a favour and does not charge him. His friend has a double garage and only one car. He does, however, use his car throughout the winter and drives it in and out of the garage, parking it right next to Mr. Smith’s stored car.
During the winter his friend accidentally bumps his car into Mr. Smith’s stored car. Obviously the accident was not Mr. Smith’s fault and he will have to collect from his friend. His friend felt that he was doing a favour and should not be charged at all. End of winter storage; end of friendship.
When Mr. Smith cancelled his collision insurance he also decided to cancel his third party liability coverage. Since he was not driving the car, he figured that he would not do any damage to anybody else while his car was in storage. Unfortunately, he failed to disconnect his battery and a small gas leak and short circuit led to a large fire destroying his car and contents of his friend’s garage. In this way, his car did indeed cause damage to a third party. Mr. Smith, however, no longer had third party liability because he removed it for the winter. He did retain fire and theft coverage for his car so at least he will be repaid for its value.
Another possible scenario is that Mr. Smith left his car keys with his friend just in case his friend had to move the car for some reason during the winter. His friend decides to borrow the car for a quick run down to the corner store because his own car had broken down and it was really important that he make this purchase.
As luck would have it, while driving Mr. Smith’s car, his friend hits an icy patch and spins out of control causing damage to a Hydro pole and lots of damage to Mr. Smith’s car. Since Mr. Smith was not expecting the car to go anywhere he had removed collision insurance and would therefore be stuck paying for the repairs himself. He could, of course, sue his friend for the cost of fixing the car and the hydro pole, but litigation is not what Mr. Smith expected when he put away his car for the winter.
Cancelling some of your insurance coverage while storing your car for the winter is a viable option but you should examine all the possible risks before deciding to do so.