Insurance When You Don’t Own a Car

Car keys in hand - Photo by Sorapong Chaipanya
Do you need auto insurance when you don’t own a car?

There are two situations you should consider.

First, if you intend to drive someone else’s car, do not automatically think the insurance of the vehicle owner will cover you. Or in other words, do not think so – know so!

Secondly, if you let your car insurance lapse just because you currently do not own a car, a new insurance in the future might carry higher car premiums than if you maintained an active insurance.

Many people that do not drive on a regular basis, like people in metropolitan areas with public transport, prefer to rent or borrow a car on an as-needed basis. The main option for maintaining an affordable car insurance policy is to get listed as an additional driver of a family member’s policy.

If you just occasionally rent a car, you should check with your credit card company. Some credit cards can provide some coverage, but make sure you understand the limits involved.

If this does not provide enough coverage, a non-owner liability policy may be the best option. Check with your insurance company. There is often a non-owner liability policy available on your homeowner’s policy or renter’s insurance policy.

Premiums for non-owner liability coverage are definitely lower than the ones you would pay at the car rental office.

Non-owner liability coverage provides liability protection both when you rent and when you borrow a car.

The insurance, however, will not cover any damage to the vehicle you are driving. It will only cover damages to the other vehicle or any medical expenses for other people involved in the accident.

Work-related driving situations may also be excluded from non-owner insurance.

Remember, car insurance coverage plans are different, and the above is meant as general information only. Always read general policy descriptions to help you understand the different types of coverages. If you have questions, talk to your insurance representative and read your policy contract to fully understand your coverages.

 

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