Do I need insurance to park my car on the road?

Can you park your car on the road without insurance? Failure to insure your vehicle, even if it's just parked, can lead to hefty fines and even a misdemeanor that will affect you in the long run. Learn more here.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: May 18, 2022

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Here's what you need to know...

  • Failing to insure a vehicle, even if it is just parked, can lead to some very hefty fines and even criminal misdemeanor charges that can affect you in the long run
  • Insurance requirements for parked vehicles vary according to the state you live in but registration is essential for every vehicle despite if it is regularly driven or not
  • States have implemented electronic verification systems as a way to easily track registration and insurance for motorists
  • Anyone who owns a vehicle that is being operated or parked should take the time to learn about  insurance requirements or financial responsibility laws in their state

Do you have to insure your car if you’re not driving it? Many assume that the only scenario where car insurance is required is when a vehicle is being driven. While the only time you can be found legally liable for an accident is when your car is being driven, you still have an obligation to insure your vehicle in other circumstances.

Every municipality has its own rules on where residents and guests are allowed to park and how long their vehicles can be parked in one place.

While many neighborhoods have a silent parking etiquette, you might be shocked to learn that the parking spot in front of your house in your residential neighborhood does not belong to you.

Instead, that curb where vehicles can be parked belongs to the city and not the property owner. When parking on streets, whether they are residential or not, you will need to have some form of insurance coverage.

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When is insurance required on parked cars?

Can you park an uninsured car on the street? If your car is parked on your private property, like a driveway, having insurance may be beneficial but not required. It is when the car is parked on the road that belongs to your city or your municipality that the benefit turns into a requirement.

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Should all vehicles have a valid vehicle registration?

Cars are required to be registered for a reason. When a vehicle is registered, officials can easily locate the owner of the vehicle, send tickets, and verify that the car can legally be driven.

The registration is essentially like an ID card for a car.

Every state has its own ordinances when it comes to parking, but in all states, the car needs a valid registration before it can be parked on public streets.

It is fine to park an unregistered vehicle in a private yard, a private property, a storage facility, or in your driveway. However, if the car is not registered to be operated it cannot be parked in spaces that are meant for cars that come and go.

Allowing unregistered vehicles to park on the street is an open invitation that says it is okay for vehicle owners to drive cars without valid plates.

What are the parking restrictions?

Some states have stricter rules than others regarding registration and parking on the road.

Instead of solely requiring a valid registration, states that have limited parking and an overload of registered vehicles are passing bans that will not allow owners with out-of-state plates to park on the street.

The New York Post states that in New York, where this new ban is being proposed, out-of-state cars are treated like cars that do not have a registration at all.

Should all registered vehicles have evidence of financial responsibility?

If you review most ordinances, they will not specifically state that vehicles need to be insured to be parked on the street.

If you understand financial responsibility laws or mandatory insurance rules, you will quickly see how parking, registration, and insurance all go hand-in-hand.

Every state has its own unique liability insurance laws. Some states allow residents who file for a self-insurance certificate with a bond to forgo buying insurance, but a majority of people who stay in compliance with the law choose to buy coverage.

The only time that you can get away with not buying coverage while you still have valid plates is by purchasing a bond or by placing a deposit as large as $30,000.

To register your vehicle in any state, you will need to show that you will be financially responsible for the damages or the bodily injuries that you could cause.

If the car is not insured, you cannot maintain your registration. Since a car must be registered to be parked on the street and insurance is required for registration, insurance is an indirect requirement.

Some of the penalties for failing to maintain continuous insurance include:

  • Suspended registration
  • Loss of driving privilege
  • Vehicle impoundment
  • Towing and storage fees
  • Citation fines
  • Requirement to file an SR-22

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Will the DMV find out if my insurance is canceled?

If you have an uninsured vehicle, your registration will be suspended, but this leaves some wondering how the city can find out your coverage is not valid.

In the past, a huge portion of uninsured vehicles had insurance that was canceled after the car was registered. However, cities all across the nation have now implemented digital verification systems.

The Insurance Information Institute reports that electronic verification systems work because the state has regulations that require carriers licensed to do business to report certain changes immediately. Changes that must be reported include:

Changes that must be reported include:

  • Activation of new coverage
  • Failure to pay the cancellation
  • Voluntary cancellation request
  • Non-renewal of insurance

The vehicle owner is sent a notice and asked to provide valid insurance when insurance cancels. If this does not happen in 14 to 30 days, the plates are suspended.

If a parking enforcement agent runs the plates, they will see they are not active and will order for the car to be towed.

What can happen when your car is parked?

If you have purchased comprehensive coverage, it will protect your parked car from:

  • Vandalism
  • A tree falling on the car
  • Hail
  • Fire
  • Flood
  • Stolen car

If you find out who damaged your car, you can file a property damage claim against their insurance company. This coverage pays out from the at-fault driver’s insurance policy. Filling a property damage claim means that you won’t have to pay a deductible and your car insurance rates won’t be affected.

If you have collision coverage, damages to your car will be covered in case you don’t know who did it. The policy will cover the repairs and pay your deductible as long as you have it.

Should you follow the rules?

If a car is simply parked, it is tempting to take the no-insurance risk.

As tempting as it is, the choice will cost you if you are caught. It takes just 15 minutes of leaving a car unoccupied to be forced to deal with expensive headaches and major hassles.

If you need insurance and you are not sure where to begin, start comparing rates now by entering your ZIP code in our FREE tool!

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