Auto Insurance for Parked Car

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Things to remember...
  • If your car is going to sit parked, you need to decide if you want to keep it registered
  • You can keep your regular registration or change the status by filing Planned Non-Op paperwork with the DMV
  • If you keep your vehicle registered, you’re legally required to keep a minimum amount of insurance on the car
  • When the owner turns in their plates, they should still consider keeping comprehensive insurance on the parked car
  • You can remove liability coverage from the car by suspending your insurance through the auto insurance carrier


It’s virtually impossible for a parked car to cause damage to property. Barring a freak accident where your parking brake somehow malfunctions, it’s not likely that any car that will be in storage for long periods of time will cause any type of third-party loss.

The risk of third-party loss is low, but there’s still the risk that something could happen to your car.

It might not sound like it makes very much sense to insure property when it’s not in use, but in some scenarios, you might legally have to do so. Since auto

Since auto insurance is a mandatory requirement, vehicle owners can’t rush their efforts to save money by terminating their existing auto insurance.

Compare car insurance quotes today to find the best price for the coverage you need. If you’re not sure how to insure your parked car, here’s what you should know:

How long is the car going to be parked?

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If your car is going to be parked for just days or weeks, there’s no reason why you should change your insurance on the car. Making changes to your insurance would just be an inconvenience.

It’s not until your car will be parked for months or even longer that you should consider making changes to insurance portfolio.

Every state has auto insurance laws. These laws are in place strictly to protect residents in the state and visitors who are passing through from suffering financial loss after being hit by a vehicle. You can take insurance off of your car, but you have to take the right steps first.

How do you know if you legally need auto insurance on your parked car?

In most states, if your car is registered it qualifies as a vehicle that must be insured. You’ll have to look up your state’s auto insurance laws to determine how much coverage is mandatory.

As long as the car is registered in your name, the insurance must also be in your name.

Not only do you have to comply with the state insurance law, but you’ll also have to comply with the terms and conditions of any contracts that you have in place pertaining to your car.

If you have an auto loan, a title loan, or the car is leased, you must comply with the conditions of the financial contract by keeping insurance on the car. It’s not a crime to remove coverage, but doing so could void your contract and cost you money.

How are you penalized when you remove insurance from a financed car?

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Lenders and lessors require their borrowers to insure the property that they are financing. The companies are more concerned with the first-party vehicle coverage than the other coverage that’s deemed mandatory by the state.

Insurance carriers must send loss payees notices verifying that the coverage exists.

If the finance company is notified that your coverage has lapsed, the finance company will reach out to you.

When the borrower can’t show that they have both comprehensive and collision coverage on the financed car, the lender will add lender-placed insurance to the loan to protect their interests. This lender-placed insurance raises your payment and even the balance of the loan.

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How can you file your car as parked through the DMV?

If you really don’t want to keep insurance on your car and it will be parked for a long period of time, the best option is to notify the DMV that the car isn’t being operated.

In most states, you are given the option to file the car as Planned Non-Operable when the registration is about to renew.

Once you file the car as a PNO, the following are restrictions to prepare for:

  • you can’t move it without applying for a placard
  • you also can’t park the car in a public area
  • you can’t tow it

These are some serious restrictions but there is an upside to consider.

If the car is filed as a PNO, you don’t have to comply with insurance laws set by the state government. You will also receive a refund of the registration fees you’ve already paid.

What can you do with your insurance if your car is filed as a PNO?

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One of the first options that comes to mind once you are sure you won’t be driving your car would be to cancel your insurance. When you cancel your insurance, you’ll be entitled to a refund of your paid premiums and you won’t have to manage a policy while you’re not driving.

Canceling your insurance could seem like the best option, but some vehicle owners with parked cars are choosing a better alternative. The better alternative would be to suspend the auto insurance coverage while the car is parked.

This suspension means that the policy is put on hold until you call the agent to reactivate it. You’ll have the same policy number when you need your coverage back.

What are the benefits of suspending your insurance on a parked car?

The biggest benefit of suspending auto insurance instead of canceling it is that you’ll be able to maintain an insurance record without any lapses in coverage.

Having experience as an insurance client can save you money in the future. If you do keep coverage with the same carrier, you’ll still be able to get a loyalty discount as well.

Not only will your premiums in the future be lower, but you can also insure your car while it’s sitting. Most insurers will give their clients the option to keep comprehensive coverage. That’s the only thing you’ll need if the car really is only sitting in a driveway or garage.

If you want to buy car insurance for a parked car, consider what you’re doing with the registration first. Those who prefer to keep the registration active will need to buy standard coverage.

To keep your standard coverage premiums low, get quotes and find special discounts by shopping for your next car insurance policy online. Enter your zip code below to begin comparison shopping!

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