I don’t have a car, do I need car insurance?

I don't have a car, do I need car insurance?

Unfortunately, there is no clear cut answer to this question, because lifestyles differ from person to person. With that said, there are some things to consider if you have been concerned about not having auto insurance or you are thinking that you might cancel your current coverage.

Many times, people find themselves between vehicles and they think they don’t need auto insurance because they are without a car. If this is going to be you, and you think you will be getting another car, you still need insurance! A gap or lapse in coverage is a key rating factor for most insurance carriers. Whether or not you have a car is irrelevant. In fact, you will end up paying a much higher premium for your new policy if you can’t show continuous coverage. I have had several clients who chose to perhaps take the bus rather than own a car. Or their car was not in a condition to drive. They went without the insurance and when they finally resolved their transportation issues, were shocked by the new premiums.

In another scenario, perhaps you borrow a friend or family member’s car from time to time or for an extended period of time. If you aren’t listed on their policy as a driver, at the very least an occasional driver, this could put you and your friend or family at a great risk. Some carriers might deny coverage if you aren’t listed. I’ve seen it and it isn’t pretty. The good Samaritan who is helping you out could end up with their insurance cancelled if you aren’t listed. So if you are frequently borrowing cars, or using one for an extended period of time, it is better for everyone involved if you still carry your own insurance. Aside from having your own policy, if you do think you are borrowing a friend’s car for an extended period of time, make sure they check with their agent as to the whether or not you need to be listed.  In this, honest is truly the best policy for everyone involved.  This could be an expensive oversight.

But how do you carry auto insurance if you don’t own a car? Request a non-owned auto policy. If your driving record is clean, this can be an affordable means to bridge the gap while you are without a car. Otherwise when you elect to finally get that coverage, you’ll be in for sticker shock. And besides, who wants to pay more when they really don’t need to.

Photo by: Pictures of Money, Flickr