No Car? Do You Still Need Auto Insurance?

Road Trip In some parts of the country owning a car is not as important and many people use mass transit and rent cars for a weekend get-a-way or vacation. Urban Americans are choosing to use public transportation for day-to-day commutes. Young adults away at college find it is actually easier to live on campus without a car. When it’s time to get away from the city, or make a visit back home most people find a car is the easiest way to get where they want to go.

If you drive at all, it’s a good idea to have an automobile insurance policy–even if you don’t own a car.

Most insurance companies offer a “non-owners policy” for people who don’t own a car but occasionally drive or rent a car. Non-owners policies usually cover an insured with liability, medical payments, and uninsured/underinsured motorist coverage. Non-owners policies usually don’t insure for comprehensive, collision, towing reimbursement, or rental reimbursement coverage.

Most drivers can get just about the same insurance coverage when renting a car by purchasing the car rental insurance offered by the rental company. However, if someone rents a car for more than, 10 days per year, it is usually more cost effective to purchase a non-owner auto insurance policy. The usual non-owners policy premiums will range in cost from $300 to $500 per year. The premium will vary depending on where the driver lives, the driving record, and some other underwriting information.

A non-owners auto insurance policy offers coverage for any car the insured driver wants to drive, not just rental cars. If the insured driver borrows a car from a friend and then were to get into an accident, the friend’s insurance would be the first to cover the losses But if the accident was your fault and the damage to the other driver’s property exceeded the liability limits on your friend’s policy, your non-owners insurance policy would cover the excess, up to policy limits.

If you don’t have a car now and plan to get one in the future maintaining a non-owner auto insurance policy will also give you prior insurance history and offer you more preferred premiums when you do purchase a car and want to cover it fully with insurance.

Photo credit for this blog entry: sxc (no use restrictions for this photo)

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