Auto Insurance for a Parked Car [2020 COVID-19]

You can save up to 30% on your car insurance rates with auto insurance for a parked car, but not every car qualifies. You will need to meet state laws, insurance company policy, and your lender's requirements for auto insurance for a parked car

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
Licensed Insurance Agent

UPDATED: Jun 17, 2020

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Things to remember...

  • If you’re driving less during COVID-19, you can lower your auto insurance rates
  • 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-Operational 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 your auto insurance carrier

If you have a car that’s going to be parked or stored for a prolonged period of time, why carry full-coverage insurance on it? When it’s not being driven, you’re probably not going to be found at-fault for an accident — barring a freak accident where your parking brake disengages. But what type of car insurance coverage do you need for a car that’s not going anywhere?

We’re going to go over why you may want auto insurance for a parked car and what steps you need to take. Whether you have a car in storage, sitting in your driveway, or going undriven due to the coronavirus, let’s see what your options are.

Compare car insurance quotes today to find the best price for the coverage you need. If you’re wondering how to insure your parked car, here’s what you should know.

Should you get auto insurance for a parked car if you’re driving less in the COVID-19 pandemic?

Obviously, the rules have changed to some extent as a result of COVID-19. According to John Hopkins University, the United States now has more cases of infections by the novel coronavirus than any other country. It’s a scary time, and a record number of people are staying at home. Pollution is even clearing in parts of the world, with less traffic and engine emissions that cause smog.

You can see below just how the cases have been growing in the United States.

View as image

If you’re working from home due to the novel coronavirus — or if you’ve sadly become one of the newly unemployed during this time — you’re not going to be driving as much.

The requirements for parked-car insurance vary by insurer, so it really depends on your situation. If you are now self-isolating, having your groceries delivered through Instacart, DoorDash, or any of the other food delivery services, it may be worth considering.

Keep in mind that most insurers will only allow you to drop to comprehensive-only coverage if you have a different car on the policy that is fully insured, so it also depends on your home situation. If you have multiple vehicles to choose from just in case, you might want to think about it. Contact your insurer to see if you qualify.

Just remember to set a reminder on your calendar — or even put a reminder on the vehicle’s dash — to call and revert back to your old coverage before you take the car out for a drive.

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What is parked car insurance?

It’s virtually impossible for a parked car to cause damage to property. The risk of third-party loss is low, but there’s still a possibility that something could happen to your car.

It might not sound very logical to insure property when it’s not in use, but in some scenarios, you might legally have to do so. Since auto insurance is a mandatory requirement, vehicle owners can’t rush their efforts to save money by terminating their existing auto insurance.

First off, why would you want to cover a car that isn’t even going to be driven? It’s for all those incidentals. What if something falls on your car, or what about fires and floods? Let’s look at what’s included in your auto insurance and why you want to keep comprehensive, at the very least. And comprehensive-only coverage is what parked-car insurance is all about.

What does comprehensive insurance cover?

First, make sure your vehicle is stored away properly. You must prepare your car if you’re planning on leaving it undriven for a long period of time. This video can help you remember what steps to take before storing it away.

So, you’ve cleaned up and prepared your car. Now, what sort of insurance do you need?

There are many different types of auto insurance that might go into your policy.

Though minimum car insurance required in each state differs, you’ll normally have to have a certain amount of liability insurance in case you hit someone else’s vehicle or other property while you’re driving. Liability insurance will pay for the damages. Then, you have collision insurance. Collision is there to cover your own damages if you’re hit by an uninsured vehicle or if you’re found to be at fault.

But you’re here to find out about parked-car insurance, and the part about not driving is what’s important. The relevant type of insurance here is comprehensive coverage.

Though the details depend on your insurer’s requirements, parked-car insurance is special because it allows you to drop liability and collision. If you only carry comprehensive on the vehicle, you must not drive the car at all.

If you even drive it around the neighborhood, you run the risk of having an accident. You’ll have to cover damages out of your own pocket if you don’t have the right type of coverage.

Comprehensive covers things like a tree limb falling on your vehicle, theft, or vandalism. Leading into spring, hail storm and high winds —those darned tree limbs— can become a problem and damage the car sitting in your driveway.

Allstate summarizes what comprehensive insurance covers in the video below.

Even if you have your vehicle in a storage garage, you’re going to want to prepare for things like hurricanes or tornados, both of which can cause major damage to a building and its contents. And, unless your storage facility has top-notch security, there’s still a risk of theft or vandalism. If you want to get car storage insurance from Geico, or any car insurance company, check with your provider to see what they offer.

So, how much is storage insurance for a car? How much you’ll pay certainly varies too, and part of that is location, location, location. There are many factors that influence what you’ll pay, but where you live is a big one. You can see the average comprehensive rates here for the five-year period between 2011 and 2015. This information comes from the National Association of Insurance Commissioners.

Average Comprehensive Auto Insurance Rates by State
District of Columbia$233.24$233.65$230.19$227.97$226.22$230.25
South Dakota$258.11$242.27$227.31$214.07$201.21$228.59
North Dakota$231.04$233.06$229.05$225.42$219.63$227.64
West Virginia$204.28$200.10$195.28$189.20$186.32$195.04
New Mexico$172.57$167.70$162.39$163.02$168.75$166.89
South Carolina$180.94$175.19$165.41$156.22$149.16$165.38
New York$171.12$165.07$155.65$147.33$144.13$156.66
New Jersey$131.35$126.26$122.54$117.64$118.10$123.18
North Carolina$136.08$130.37$121.66$115.06$111.83$123.00
Rhode Island$132.19$125.17$118.86$116.41$118.21$122.17
New Hampshire$110.77$106.62$102.02$99.24$96.52$103.03
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The District of Columbia tops the list for most expensive on average, with Oregon showing up as the cheapest.

Considering a lot of stored vehicles are expensive, seasonally-driven cars, the cost is worth it.

How long does a car have to be stationary to qualify for parked-car auto insurance?

Depending on the insurance company, they may require you to have the car in storage for a minimum amount of time — like 30+ or 60+ days— before you qualify. For State Farm  or Geico parked car insurance, for example, you will need to talk to your agent before changing the policy.

But, the general rule of thumb is: if your car is going to be parked for just days or weeks, there’s no reason you should change your insurance, as it wouldn’t be worth the inconvenience.

Snowbirds who fly the coop to Florida every year often take advantage of this option.

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

Most importantly, don’t drop your liability and collision coverages if you’re planning on driving the car at all. If you go out on a short ride but end up damaging someone else’s property or get into an accident with an uninsured driver, your policy isn’t going to cover it, since your car is supposed to be sitting unused.

You may want to brush up on your state’s 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 remove insurance from 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?

What situation allows you to drop your insurance? Do you need insurance on a car that doesn’t run? What if you just aren’t driving it for the winter? Can I keep my car parked without insurance?

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.

You may be required by your lender to keep a minimum amount of insurance on a financed car at all times. If that’s the case, you can’t really drop the coverage on your vehicle without violating your contract and possibly being subject to fines and penalties.

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How are you penalized when you remove auto insurance from a financed vehicle?

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 is in place.

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.

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.

From there, it really varies by state. For instance, California gives you 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, you may have to deal with the following restrictions:

  • You can’t move it without applying for a placard
  • You 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’ll also receive a refund of the registration fees you’ve already paid.

It truly does vary across states, with North Carolina requiring you to turn in the vehicle’s license plate before dropping liability coverage if you’ll be storing it for a long period of time.

Make sure to check with your state’s DMV before dropping down to comprehensive-only.

What can you do with your insurance if your car is filed as a Planned Non-Operable (PNO)?

One option available to you when you’re sure you won’t be driving your car is 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 — to suspend auto insurance coverage temporarily 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.

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What are some other ways you can save money on your auto insurance during COVID-19?

It’s impossible to predict how long the fallout from the novel coronavirus will last. What if your car is just sitting in the driveway?

You have options. Let’s take a look at a few.

Can you change to pay-per-mile auto insurance during the COVID-19 pandemic?

True pay-per-mile insurance is hard to find, with only a few companies offering it and it’s not available everywhere. Metromile is one of the biggest companies focusing on pay-per-mile insurance. They’re only operating in a handful of states, but if you live in one of them, you might want to take a look at how it works in the video below.

It might not be worth switching insurance companies, however, especially if you plan to return to a long commute after the pandemic is over.

Do you normally have a short commute? You might want to check into usage-based insurance. For the most part, pay-per-mile car insurance is used by people who have a super short commute from their home to work, or for back-up vehicles.

These policies are often written for six-month periods, so keep that in mind. At this time, we don’t know how long the COVID-19 pandemic will be affecting our daily lives. You might be subject to a cancellation fee if things return to normal and you cancel the pay-per-mile auto insurance coverage in order to reinstate your traditional policy.

That said, you can still look into usage-based auto insurance and see if it might be worth it if these criteria fit your everyday life. It varies for each driver and is not available in each state.

How can you save money on your existing auto insurance during the COVID-19 pandemic?

If you’re happy with your car insurance, but you’re just not driving much right now, there are a few things you may be able to do in order to save some cash.

Update Your Commute Length

How mileage affects car insurance can be confusing. It’s true that the number of miles you put on your vehicle really can be a significant factor in how much you’re charged for auto insurance, but most companies have brackets for mileage rather than counting specifically.

If you’ve found yourself making playlists for the drive to work, you’re probably paying more for your insurance than you’d like. Now, things may have changed.

WIthout a long commute, you may want to call your insurance company and update your information. This can lower your rates, so it’s definitely worth getting in touch.

Why does commute matter? Well, it comes down to how much risk you are to the insurer. When you’re driving more miles every day, you’re going to have a higher risk of getting into an accident, which would likely result in the insurer having to pay out a claim.

Lower Your Coverage Limits

Another thing you may be able to lower would be your coverage limits. If you have a high level of coverage, you might want to consider changing it to a lower or medium level.

Granted, this doesn’t always save a lot of money, but it varies based on a number of factors. Plus, if you have an older vehicle, it might just make sense anyway, COVID-19 aside.

Will you be getting a coronavirus-related refund on your auto insurance?

Even if you haven’t designated your vehicle as being parked or in storage, you may still be getting a refund for not using it. StreetLight Data reports that traffic is down across the country. New York City and Chicago — two of the cities hardest hit by the virus —  are seeing a decline in traffic of 93 percent and 69 percent, respectively.

The Consumer Federation of America has urged insurers to return a portion of premiums since fewer people are driving, which means fewer accidents and fewer claims paid out.

So far, most of the largest insurers in the country have announced how they’re refunding a portion of premiums.

Which Auto Insurers are Giving COVID-19 Refunds
CompanyAmount RefundedMethod of Refund
Allstate (including Esurance, and Encompass)15% of April and May premiums
($600 million total)
Option of either credit or cash refund
American Family (AmFam)$50 per vehicle
($200 million total)
Paper check
Farmers25% of April premiumsCredit
Geico15% at renewal, an average of $150 per auto policy
($2.5 billion total)
Liberty Mutual & Safeco15% for two months of premiums
($250 million total)
Option of either credit or cash refund
Nationwide$50 per policyCash
Progressive20% for April and May premiumsCredit
State Farm25% of premium between March 20 and May 31
($2 billion total)
Travelers15% for April and May's premiumsCredit
USAA20% for two months of premiums
($520 million total)
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Also, if you do end up needing your car insurance representative, they’re still available. Many of them have now converted to work-from-home, with more reliance on mobile apps and video calls for claims.

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 start comparison shopping!

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