Everyone knows that car insurance is mandatory in Canada and that it is illegal to drive a vehicle that is not insured with the required minimum coverage. But what about a vehicle that is not driven regularly? In this article, we will explore how car insurance for parked vehicles is handled in Ontario and Alberta and how you can protect your vehicle investment, even if you are not driving it, either temporarily or permanently.
Frequently Asked Questions
What is parked insurance?
While you won’t find a product called “parked insurance” in Alberta or Ontario, you will be able to easily access insurance coverage to protect a vehicle that is in storage on private property.
There are many reasons why you may need or want to place a vehicle in storage, such as:
- Leaving the country for work or pleasure for several months or even years
- Vehicles in your garage that you are tinkering with or restoring as part of a long-term project
- Driving one dedicated vehicle in the winter and another in the summer
- Experiencing a temporary medical issue that does not allow you to drive
- Seniors or others who choose not to drive during the winter months
- Vehicles that are not operational but do have retained value
In all those scenarios and others, vehicle owners have the option of removing what is referred to as “road coverages” or “driving coverages” and keeping only comprehensive coverage on the vehicle while it is in storage or parked.
Comprehensive coverage provides protection against the most common losses that can happen to a car while it is parked. In Ontario and Alberta, comprehensive coverage will provide protection against the following:
- Fire – originating either in the vehicle itself or the building or area in which it’s parked
- Vandalism – cars parked long term can be an attractive nuisance for rambunctious teens and vandals
- Theft or attempted theft – important at a time when vehicle theft rates are rising across the country
- Lightning, windstorm, or hail – especially important if the vehicle is parked outside
- Flood – a coverage becoming more important due to extreme weather events caused by climate change
- Earthquake – important in areas close to active faults
- Riot or civil disturbance – this is a rare occurrence, but it does occasionally happen
- Falling or flying objects – this covers everything from thrown baseballs to falling tree limbs
You should understand what coverages are removed when you choose to remove the mandatory road coverages required to drive in Ontario and Alberta and retain only comprehensive coverage for parked vehicles. If you decide to reduce coverage to only comprehensive, you will no longer have the following protection:
Third-party liability – protects you in case you injure someone or their property.
Accident benefits – covers medical, home care, physio and other expenses if you are injured due to a car accident.
Direct compensation property damage – steps in to pay for damage to your vehicle and property when the accident is caused by another driver
Uninsured motorist – protects you when your vehicle is damaged by a driver who doesn’t have insurance on their car
You can learn more about these coverages in Which car insurance is mandatory in Ontario
You will also lose any optional collision coverage should you pare down the policy to the basic protection for a vehicle in storage.
Is auto insurance required for a parked vehicle?
There is no law in Ontario or Alberta that requires an owner to insure their vehicle while it is stored or parked on private property. In that way, parked vehicle insurance is completely optional.
However, there are some compelling reasons to consider insurance for your parked or stored vehicle. The first is to protect your financial investment in the vehicle. The perils covered by comprehensive insurance are common; garages do burn, cars are stolen with surprising frequency, kids do decide to use parked vehicles as forts and play-toys… or worse.
Comprehensive insurance is relatively inexpensive in Ontario and Quebec and can provide you with peace of mind that your stored vehicle is covered should anything unexpected occur.
If the stored vehicle is your only vehicle, removing all insurance coverage can create a “gap” in your insurance history that can affect your insurance and premiums in the future. While it’s unlikely that a gap of a couple of months will be of concern to insurance providers, longer periods without insurance might result in you being treated as an inexperienced driver when you do shop for insurance, replacing years of driving history and increasing your premiums.
Is it legal to park an uninsured car on a city street?
In both Alberta and Ontario, it is not legal to park an uninsured car on a city street. Any vehicle parked on a city street or public road needs to have valid license plates and all mandatory insurance coverage in place by law. Failure to abide by this law means that your vehicle can be impounded by authorities and not released until you can prove the vehicle is licensed and insured.
Parking an uninsured vehicle on a street or road also exposes you to costly liability claims should the vehicle be involved in any type of accident or be involved in any type of injury. With no insurance in place, you will be on the hook for any claims made against you.
Can I drive with my car insurance for parked vehicles?
If you have removed all coverage on the vehicle except for comprehensive coverage, it is not legal to drive the vehicle on public roads or highways. Any vehicle driven on Ontario and Alberta roads must maintain an insurance policy with all mandatory coverages.
Is car insurance for parked vehicles mandatory in Canada?
As mentioned above, parked insurance is not mandatory in Canada. It is optional coverage.
However, if you lease your vehicle or finance it through a bank or other lending institution, they may contractually require you to maintain certain insurance on the vehicle. Be sure to check with your finance company before you remove any insurance coverage.
How can I get car insurance for parked vehicles?
In Ontario, if you want to remove road coverages on your vehicle and it is the only vehicle on your policy, companies require you to include an OPCF 16 on your coverage, which reduces coverage but keeps Accident Benefits coverage in the event you are injured in an auto accident as a passenger.
Purchasing insurance for a parked vehicle or removing road coverages from an existing car insurance policy is quite simple in Alberta and Ontario. All you have to do is call your insurance professional and tell them your specific circumstances. They will then recommend the best way for you to protect your vehicle and yourself at the lowest cost.