The relationship between Ontario drivers and their vehicles is changing. This shift is fueled by the COVID-19 pandemic, soaring gas prices and the higher costs of living. Drivers are looking to hold, or even cancel, their car insurance. But what if you just want parking insurance – is that an option? Can you park your car on the road without insurance? In this article, we’ll examine what parking insurance is, and help you figure out the risks involved with this scaled-back auto coverage.
What is parking insurance or “parked car” insurance?
A parked car insurance policy is a comprehensive auto insurance policy that you can purchase (or reduce your current auto insurance policy to) in order to protect your vehicle when you are not driving for an extended period of time. Parked car insurance, also known as comprehensive car insurance, protects your vehicle while it is parked. It’s not required by law; however, it’s a common add-on to any standard auto insurance policy across Canada.
What does parking insurance cover?
According to the Financial Services Regulatory Authority of Ontario (FSRAO), comprehensive coverage pays for “losses, other than those covered by collision or upset. This includes perils or dangers listed under specified perils, falling or flying objects, missiles and vandalism.” Comprehensive coverage for parked cars provides vehicle owner’s coverage in the event a tree falls on it, is stolen, or becomes a victim of vandalism and other dangers listed under specified perils in the owner’s insurance policy while the car is parked. Unlike standard auto insurance, this coverage typically does not include collision or liability coverages.
Reasons to have parking insurance
The most common reason is to provide coverage for the vehicle in the event it is damaged while parked or in storage. Other reasons may include:
- Seasonal vehicle that is only driven in the warmer months
- Out of country protection: Snowbirds, as well as others, that take extended trips away from home
- More than one vehicle
- To avoid a gap in car insurance
- Protection if the vehicle is stolen or vandalized
- Fire protection
- The vehicle is not operational
- Your financial circumstances have changed
- Loss of your license temporarily due to medical issues
- You can no longer drive as your license has been revoked
The main reason that drivers should have parking insurance is to get peace of mind. Your vehicle can potentially get damaged by the elements, other drivers and a number of other potential risks. As anyone who has ever been a victim of a hit-and-run accident can attest, even while it’s parked on the side of the road, your vehicle always has potential for risk.
How much does parking insurance cost?
There are many factors that go into calculating your insurance premiums. Here are just a few:
- Personal details: Factors, such as your age, gender and level of driver’s licence play a role in your premiums.
- Your location: Where you live influences how much auto insurance you pay. If you live in the downtown core, you have a higher risk of theft, accidents and damages. Therefore, your premiums may be higher as a result.
- The make, model and production year of your vehicle: Your vehicle is as unique as you are. The way it affects your premiums is unique, as well.
- Amount and type of usage: Hardly driving your car during the pandemic? You may qualify for lower car insurance rates. Call us and ask us how!
Generally, most low-risk drivers pay anywhere from $100 to $300 for parked car insurance. You can reach out to one of our isure representatives for specific information on pricing.
When don’t I need parked car insurance?
If the vehicle is parked on your property or in your garage, or you are just keeping it for parts, insuring it will not make sense. However, even if the vehicle is only worth $2,000, it is still worth putting parked car insurance on the vehicle.
What happens if I don’t have insurance on my parked card and it gets damaged?
If you do not have comprehensive coverage on your parked car and a tree falls on it, you will have to pay the damage costs out of your own pocket. Also, keep in mind that cancelling car insurance on a parked vehicle may cause a gap in your insurance history, which can affect your future insurance rates.
Can I drive with only parking insurance?
No. You cannot drive your vehicle while it has only parking insurance. As it is only comprehensive coverage, any accident or injury that occurs will not protect you from liability related to the accident. There will be serious consequences if you do drive without adequate insurance coverage.
Do I need car insurance if my car is unused?
It is not mandatory to have parked car insurance in Ontario, but it is a good idea to provide protection to your vehicle while not in use. Although, drivers in Ontario do need liability insurance if they’re planning on storing their vehicle in a public area for an extended period. It is necessary because a parked vehicle can potentially harm a third-party (for instance, a car that’s parked on a hill slides into a nearby pedestrian). You will also need liability insurance if you plan on moving your parked vehicle at any point throughout the winter.
FYI: If you have collision insurance, then you may be able to pause the coverage temporarily if you park the vehicle indoors. This is due to the fact that there’s practically no risk of a collision, however, always check with your isure broker before doing so.
Is parking insurance a requirement in Ontario?
What if your car is hit in a parking lot? What coverage should you have: comprehensive or collision? If you’re in a hit-and-run accident and are unable to identify the driver, you’ll need collision insurance to pay for damages. So, if you’re parking your vehicle on the street (not a driveway), you should keep collision insurance.
Can I leave my car without insurance?
If you’re holding on to your car, it’s not worth it to cancel your insurance. Driving without insurance is illegal, and the consequences are severe. If you’re looking for parked car insurance, the answer is to reduce your coverage to comprehensive only.
Having an uninsured car on your driveway seems safe, but there are many risks. Instead, get parking insurance and protect yourself from potential threats. Remember, comprehensive coverage is parking insurance, so don’t take the risk of driving your vehicle. Your car should stay parked until you reactivate full coverage. Speak with one of our isure representatives if you are thinking about parking your vehicle and would like to discuss the insurance associated with it.