Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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UPDATED: Sep 27, 2021

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Here's what you need to know...

  • Financial responsibility and mandatory auto insurance laws only apply to vehicles that are registered to be operated on public roads
  • In most states, you’re required to carry liability coverage that pays for third-party expenses after a loss
  • If a vehicle has been registered through the Motor Vehicle Department as Planned Non-Operational (PNO), you aren’t legally required to purchase the state-mandated car insurance coverage
  • If your car is off the road being stored in a parking lot or garage, you aren’t legally required to buy liability insurance
  • Vehicle owners with cars that do hold some value should consider buying storage insurance on their vehicle to protect it against damages that can happen while parked
  • If a vehicle is being stored but still holds an active registration, you do need to maintain liability insurance. Many states require owners to turn in their plates if they plan on registering the car as a non-op

Most drivers are aware of the fact that they need auto insurance coverage to drive their vehicles on public roads, but not everyone knows whether or not they need coverage when their vehicle is off the road for long periods of time. If you’re storing your vehicle while you’re out of the country or your car isn’t operable and you don’t plan on fixing it, it’s important to brush up on your familiarity with your state’s insurance laws.

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Not all vehicles off the road need insurance but there are vehicles that do. It’s important to find out what the compulsory insurance laws mandate and what requirements must be met before you can remove coverage from a car titled in your name. Removing coverage too early could result in fines and removing the wrong coverage could lead to uncovered losses. Here are the actions that you must take to ensure that it’s the right time to take coverage off of a stored car:

When does the state require you to hold insurance?

Everyone drives by a house that has an old clunker sitting in their driveway. This house is the eyesore of the block because it’s quite obvious the car hasn’t been operable for years.

Believe it or not, the owner choosing to hold onto their memories in the form of a clunker might not legally have to cover the vehicle.

Most state officials require vehicle owners to carry insurance. In states with a mandatory insurance requirement or a financial responsibility law, the owner is only obligated to comply when the vehicle has a valid registration in the state. If the car isn’t registered or is registered non-operational, the owner doesn’t bear the burden of carrying the coverage options that are required by law.

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If my vehicle is parked, am I required by law to carry insurance?

This all depends on where your vehicle is parked. If your vehicle is parked on your own property and you have turned in your plates, you have every right to legally remove coverage from the car. If the vehicle is still registered but is parked on your property, you’ll need to keep the coverage to avoid the penalties. It can’t physically be removed until you’ve notified the motor vehicle agency that the car isn’t being operated.

Vehicles that are parked on public roads or in public parking lots are another story. If you don’t own the property, there’s a good chance that the city will require you to maintain your registration. Since a car parked on a public road needs to be registered, the car also needs to be insured. Unregistered cars sitting on a public road for too long may be towed or impounded.

If the car is registered, what coverage options must be carried?

Insurance requirements vary by state. In some states, you’re required to carry third-party liability insurance and in others, you’re required to carry Personal Injury Protection. You should first learn if you live in a state that practices tort law or no-fault law. Here are the most common requirements:

  • Bodily Injury: Bodily Injury (BI) is third-party liability coverage that’s required in states with tort-based insurance systems. Under tort law, the driver who causes a collision must pay for the damages that they cause. BI pays for the medical expenses other drivers and passengers incur.
  • Property Damage: Property Damage (PD) is another form of liability coverage that pays for third-party damages. Unlike BI, PD is required in states operating under both tort law and no-fault law. It will pay to repair vehicles and all different types of real property that you damage but don’t own.
  • Personal Injury Protection: Personal Injury Protection (PIP) is a form of no-fault coverage that pays for your own medical expenses when you’ve been injured in an accident. This coverage isn’t based on fault but is only available in a no-fault state.
  • Uninsured Motorist Protection: Uninsured Motorist (UM) may be required in no-fault states and tort states. It is designed to pay for your medical expenses when someone without insurance hits you. It will also pay if someone with low limits injures you and your medical bills exceed the limits the driver carries.

Is it recommended to cancel a policy outright when your car is a non-op?

Having a valid registration is a requirement to insure a vehicle. With this being said, it is possible to keep some coverage on a vehicle when it’s non-operable or parked. Whether or not you feel like it’s wise to keep coverage on the car depends on its value and your intentions. Before you cancel the policy outright you should consider the benefits of carrying storage insurance.

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What is storage insurance?

Storage insurance is an insurance plan that will provide only comprehensive coverage for damage to your vehicle while it’s parked or in storage. This policy doesn’t provide liability or collision insurance. Some of the causes of damage that are covered include:

  • Fire
  • Theft
  • Vandalism
  • Falling objects
  • Explosion
  • Flood
  • Incident with a live animal

When should you keep comprehensive on a vehicle that’s parked?

If your vehicle is valuable but you can’t repair it, you should consider keeping comprehensive until you can. This gives you peace of mind that you can replace the car if something happens while it’s off of the road. It’s also wise to keep comprehensive coverage to hold onto multi-car discounts and to keep your loyalty or prior insurance credits with your current insurer.

It’s time to price the cost of storage coverage before the unexpected happens. If you’re taking chances and leaving everything up to fate, it’s time to shop around. You can either contact several different companies throughout the week or you can use your time wisely by using an online insurance quoting tool. Enter your car’s information in the tool, disclose your personal details, and then sift through the instant quotes that you’re given in the results. Enter your zip code in our FREE tool below to compare auto rates now!