A method for determining blockage of a vehicular camera includes providing a camera and mounting the camera at a vehicle so as to view exterior of the vehicle. The control determines at least one selected from the group consisting of (i) that the imaging sensor is totally blocked by determining that the count of bright photosensor pixels of the camera's imaging sensor remains below a threshold, and (ii) that the imaging sensor is partially blocked by determining continuity of intensity variations in different regions of the imaging sensor. The control, responsive to determination of either total blockage or partial blockage of the imaging sensor of the camera, adapts image processing by the image processor of frames of image data captured by the camera to accommodate (i) the determined total blockage of the imaging sensor of the camera or (ii) the determined partial blockage of the imaging sensor of the camera.