You May Need Car Insurance Even If You Don’t Own a Car
Cars are expensive – even used cars are no longer a cheap option. So it’s not surprising that people living in areas where a car isn’t an absolute necessity might shy away from owning one. In addition to the costs of purchasing, maintaining, and fueling your car, there is also auto insurance , which costs on average between $53 and $192 per month , depending on the coverage you choose .
But we live in a car-centric society, and not having a car doesn’t mean you’ll never need one. Luckily, there are plenty of options for getting access to a vehicle for a short period of time, from traditional car rentals to car sharing apps and, in a pinch, borrowing a friend’s car. And you might assume that when you’re just using a car temporarily, you don’t need your own liability insurance, but that’s not always the case. Sometimes it’s a really good idea to buy something called Non-Owner Car Insurance .
Non-Owner Car Insurance
Non-owner car insurance is secondary insurance —additional coverage that kicks in after your primary insurance reaches its limit. When you borrow or lease a car that belongs to another person, their insurance will cover the car, even if you are not officially named on the policy. So why do you need your own policy? Because of liability: If you get into an accident while driving someone else’s car and the damage exceeds the basic policy limits—or if the basic policy denies the claim entirely—you’ll have to pay the additional costs.
Let’s say you borrow a friend’s car and his liability insurance has a limit of $20,000 for bodily injury. You get into an accident that leaves the other driver with $30,000 in medical bills. If you don’t have supplemental insurance, your friend’s insurance will pay $20,000 and you’ll have to pay the rest. Considering that the average cost of an “obvious” injury in a car accident is $42,000, and that “disabling” injuries can reach $162,000, it’s easy to see how problematic it can be to get into an accident without your own insurance.
Like regular car insurance, non-owner car insurance starts with basic liability and often includes the option to add bodily injury, medical payments, or uninsured motorist coverage. You should check with your insurer to make sure you know exactly what your policy covers.
Besides the financial risk associated with driving any vehicle, there’s another important reason you might want to consider non-owner car insurance if you regularly borrow or lease cars: your rates. If you’re temporarily without your own car, purchasing non-owner car insurance can help keep your rates stable. If you go more than 31 days without auto insurance, your rates could jump up to 35% . Non-owner car insurance keeps your coverage current, which can pay off if you plan to own your own car again soon.
Who needs it?
Just because you don’t currently own a car and sometimes have to borrow or lease one doesn’t mean you need non-owner car insurance. Here are instructions for who needs it and who doesn’t:
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Frequent rental or share. If you rent cars or use a car sharing platform several times a month, you should probably have non-owner insurance. If you rent a car once or twice a year for travel or special needs, this probably isn’t necessary.
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Periodic borrowing. If you routinely borrow a friend’s car, they should probably include you as a driver on their insurance , meaning you don’t need non-owner insurance. However, if you regularly borrow different cars from different people, you should probably get your own insurance coverage, since your use probably doesn’t make you a listed driver.
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Company car. If you drive a company car, check the terms and conditions of its insurance. Not all company vehicles are intended for personal use . If you drive a company car on the weekends or run weekly errands, you may need non-owner insurance to protect yourself in the event of an accident.