How does parking insurance work in Canada?

The way many Canadians are viewing car insurance has changed post-pandemic, largely due to the current economic landscape. Many drivers are now looking to temporarily pause or even cancel their car insurance, as they seek to save money due to rising rates. So, what if you want to take your vehicle off the road for awhile as a way to save money, could you simply park it in your garage and save on your insurance? The simplest answer is yes, but you need to understand the rules and coverage implications around parking insurance before making the final decision to move forward with it. Let's examine the risks involved, why you should or shouldn't consider it, and how to get parking insurance.

Can I still own a car without auto insurance?

Owning a car doesn't mean you need to have insurance, but in order to legally operate the vehicle on the road it must be insured. So yes you can still own a car without an active insurance policy, but if you're cancelling just to save a few bucks it could be a mistake.  Insurance companies don’t like to see gaps of coverage within your auto insurance history - even if you maintain a clean record it could cause your rate to rise when you go to purchase a new policy. If you’re planning to keep your car, it’s not worth it to simply cancel your insurance. Remember, driving without insurance is illegal, and the consequences are severe. The better option you should consider is opting for parked car insurance coverage, it reduces your coverage to comprehensive only saving you money.

If you still are set on cancelling, check out: How to cancel you car insurance policy.

What is comprehensive coverage?

Comprehensive car insurance, sometimes referred to as parked car insurance, or fire and theft car insurance, protects your car while it’s parked. It ensures your vehicle has coverage if a tree falls on it, falls victim to vandalism, or is stolen. It’s not required by law, but it’s a common add-on to any standard auto insurance policy across Canada. In Canada, each province regulates its own insurance, so let’s dive a little deeper.

ICBC parking insurance

BC auto insurance is government-run, but ICBC collision and comprehensive can be purchased separately from a private insurance company as an add-on. Comprehensive insurance with ICBC covers you for auto theft, vandalism, fire, earthquake, wild weather, and even hitting a wild animal. It includes windshield repairs without the need to pay a deductible. Deductibles (the portion you pay before ICBC pays the rest) can range between $300 to $2,500 or more. The higher the deductible, the cheaper the cost to you.

ICBC also has exclusive coverage for a vehicle in storage, which is like a garage storage insurance policy meant as a sort of seasonal vehicle insurance (think RV). Though they still recommend adding comprehensive protection to your ICBC autoplan.

How does ICBC handle a hit and run claim for a parked car? You have to pay either a $750 deductible or the collision deductible, whichever is less. Try to get the license plate or make and model of the car if you can and call the police immediately.

What does comprehensive insurance cover in Ontario?

According to the financial services regulatory authority of Ontario (FSRAO), comprehensive coverage pays for “losses, other than those covered by collision or upset, including perils or dangers listed under specified perils, falling, or flying objects, missiles and vandalism.”

Specified perils in Ontario include:

• Fire
• Theft or attempted theft
• Lightning, windstorm or hail
• Rising water
• Earthquake or explosion
• Riot or civil disturbance
• Falling or forced landing of an aircraft or parts of an aircraft

The mandatory Ontario car insurance consists of 4 coverages:

1. Third-party liability which protects you in case you injure someone or their property.
2. Accident benefits – covers medical costs if you’re injury is originates from a car. 
3. Direct compensation property damage (DCPD) – collision insurance when you’re not at fault
4. Uninsured motorist – when the other vehicle is driven by someone who has no insurance, this is your protection.

As you can see, without comprehensive coverage, there are many ways damage to your vehicle will cost you. And without collision insurance, being in a crash where you’re even partially at fault, you'd be on the line for the repair bills. 

Hit and run for a parked car in Ontario

What if your car is hit in the parking lot – comprehensive or collision? Well, If you’re in a hit and run accident and unable to identify the driver, you’ll use collision insurance to foot the bill. This is where you will want the advice of your car insurance broker. If you plan to go to comprehensive only, but your vehicle will need to be stored on the road 24/7 it may not provide you with the full protection you need. When your vehicle is not safely parked away in a designated parking spot or in a garage, it runs a higher risk of being hit. If you must street park your vehicle, parked car insurance may not work for you. Especially, if you're required to relocate the vehicle from time to time - it would be illegal to operate it with comprehensive coverage only.

Comprehensive insurance Alberta

Alberta car insurance is similar to Ontario’s private system. It also features third-party liability and accident benefits. If you’re in a collision where the other driver is at fault and doesn’t have insurance, you’ll use the Motor Vehicle Accident Claims Program (MVAC). MVAC is also how hit and run insurance claims are handled in Alberta. They also don’t have DCPD and instead,, your insurance company will work with the at-fault driver’s insurance company to sort out the claim, which may take longer.

The comprehensive coverage, though, is the same as Ontario covering all specified periods, including fire, theft, and rising water.

The bottom line

Having an uninsured car on your driveway, in your garage, or in a private secured underground parking lot seems safe, but there are many risks. It may not also work for everyone, especially those that are required to street park their vehicle or in a parking lot. Instead, get parking insurance, or comprehensive, and protect yourself from threats. Your insurer will be happier, and, hey, maybe you can even ask for a loyalty discount.

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