Parked Cars Need Insurance Too

Whether you need insurance for a parked vehicle depends on several factors, including the location of the vehicle, the duration of storage, and the specific laws and regulations of your jurisdiction. In most cases, it is recommended to maintain at least some level of insurance coverage for parked vehicles, even if they are not being driven, to protect against risks such as theft, vandalism, fire, and natural disasters.

The type of insurance coverage required for parked vehicles varies. Some sources suggest that storage coverage or parked car insurance is sufficient, which typically includes comprehensive-only coverage for events like animal-inflicted damage, flooding, and hail damage. On the other hand, other sources recommend maintaining at least comprehensive insurance to cover a broader range of scenarios, such as theft, vandalism, fire, and natural disasters.

It is important to note that the requirements for insurance on parked vehicles may differ based on the location. For example, if the vehicle is parked on a public road, most states require a minimum amount of liability insurance. However, if the vehicle is stored in a private location, such as a garage, the insurance requirements may be more flexible.

Additionally, it is worth considering the potential consequences of not insuring a parked vehicle. Cancelling insurance coverage may result in higher rates or difficulties in obtaining insurance in the future, as insurance companies may view lapses in coverage as high-risk. Furthermore, without insurance, you would be financially responsible for any repairs or damages that occur while the vehicle is parked.

Comprehensive-only coverage

It's important to note that comprehensive-only coverage does not include liability coverage, so you will not be legally permitted to park your car on a public road. However, if you comply with the policy requirements and secure your vehicle, the chances of it being damaged by another vehicle are very low. In the event that your parked car is damaged by a driver who has insurance, you can file a claim under their property damage liability coverage to receive compensation for your repair costs.

Liability insurance

It is important to note that liability insurance does not cover damages to your own vehicle in case of a parking lot collision or a hit-and-run incident. Instead, collision coverage or uninsured motorist property damage (UMPD) coverage would be applicable in such scenarios. Additionally, comprehensive insurance can provide coverage for non-collision incidents like theft, vandalism, fire, natural disasters, or falling objects that may occur while your car is parked.

To ensure compliance with legal requirements and adequate protection, it is recommended to consult with an insurance agent or provider to determine the specific liability insurance needs for your parked vehicle. They can guide you through the process and help you understand the coverage options available, including any discounts or special programs offered by insurance companies.

Collision insurance

In terms of parked vehicles, collision insurance may come into play if the parked car is damaged due to a collision with another vehicle or object. For example, if a car is parked on a street and another vehicle collides with it, the collision insurance of the at-fault driver may cover the damage. Additionally, if someone hits a parked car and flees the scene, collision coverage can be used to repair the damage if the at-fault driver is identified and has insurance.

It is worth noting that collision insurance is typically more expensive than comprehensive coverage. However, vehicle owners can save on premiums by choosing a higher deductible. While collision insurance is not mandatory, it provides valuable protection against financial loss in the event of physical damage to a vehicle.

Uninsured motorist coverage

If you are hit by an uninsured driver, you could end up paying for medical bills or vehicle repairs out of your own pocket. Even if you file a claim against your own policy, you may have a large collision deductible or insufficient medical payments/personal injury protection to cover injuries caused to you or your passengers. Uninsured motorist coverage can help you cover these costs.

In the state of South Carolina, for example, uninsured motorist coverage is required by law. The state mandates a minimum of $25,000 per person for bodily injury and $50,000 for all persons injured in one accident. There is typically a $200 deductible for uninsured motorist coverage in South Carolina. While underinsured motorist coverage is not required, it is offered by auto insurers in the state.

State requirements

If you decide to buy car insurance for a parked vehicle, you will be entitled to compensation if your vehicle is damaged due to events such as animal-inflicted damage, theft, vandalism, natural disasters, or other events outside of your control.

• Registration and Public Roads: If your vehicle is registered with your state and parked on a public road, you are typically required to carry a minimum amount of insurance under state law. This insurance must meet the minimum liability coverage required in your state. For example, in Texas, you need $30,000 of individual bodily injury coverage, $60,000 of overall bodily injury coverage per accident, and $25,000 of property damage coverage per accident.
• Comprehensive-Only Coverage: If your vehicle is stored in a private location, such as your garage, and not driven, you may be eligible for comprehensive-only coverage. This type of insurance covers repair or replacement costs for your stored vehicle and is often referred to as "parked car insurance" or "car storage insurance." It does not include liability, collision, or uninsured motorist coverage, so it is not suitable for vehicles parked on public roads.
• State-Specific Variations: It is important to check the specific laws and regulations of your state or territory, as requirements vary. For example, in New Hampshire, liability insurance is not mandatory, while in most other states it is required. Some states, such as North Carolina, require insurance companies to notify the state's Division of Motor Vehicles (DMV) if your liability coverage is cancelled or non-renewed.
• Cancelling Insurance: While you may be tempted to cancel your insurance if your vehicle is stored for an extended period, it is generally not recommended. Cancelling your policy may violate state laws, and you will be responsible for any repairs or damages that occur while your vehicle is uninsured. Additionally, cancelling your policy can create insurance coverage gaps, leading to higher premiums in the future as insurance companies view lapses as high-risk.
• Reducing Coverage: Instead of cancelling your policy, consider reducing your coverage to comprehensive-only insurance. This will lower your premiums while still providing some financial protection for your vehicle. However, check with your state's motor vehicle department, as some states do not allow drivers to carry comprehensive-only coverage.

Frequently asked questions