Rental Protections: What Renter's Insurance Is All About

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Do You Need Car Insurance If You Don't Own A Car?

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If you have a driver's license and don't own a vehicle, you may think that you are free of the semi-annual premiums that car owners have to pay for insurance. However, there is actually a policy that you can buy that is specifically for people who don't own a car. It can be beneficial to have in the following situations.

You Regularly Use Rental Cars

If you end up renting a car frequently because you travel, you may have been getting the insurance that you purchase through the car rental company. Unfortunately, this can be very expensive in the long run. You could purchase a policy that covers the damage that you would cause while driving a rental car, which protects you from some potential big bills. Just make sure you understand what kind of coverage it has over the rental vehicle you're driving and if you are still responsible for paying for those damages.

You Drive Cars Owned By Friends or Family

Do you drive other people's vehicles fairly often? For instance, you may be driving your parents' car whenever you're driving with them, or maybe you're frequently a designated driver and taking a friend's car home. In these situations, it helps to have coverage as the non-owner of the vehicle which protects you in case you get into an accident. You do not know what kind of coverage the vehicle owner has, and if the damage you cause exceeds their policy limits, you may be responsible for the rest. Having your own policy will ensure that you are protected.

You Are Temporarily Between Cars

You may not have a vehicle at the moment because you are temporarily between vehicles and you want to save some cash per month. Be aware that canceling your policy will end the continuous coverage that you have with your insurance provider. This means you can lose any loyalty discounts, and a gap in coverage can make you seem risky and lead to higher rates. Insurance companies do look positively at continuous coverage, so keep this in mind before you cancel.

That said, auto insurance for someone that doesn't own a vehicle may not be the best idea in all situations. If you had your license revoked and currently cannot drive, having coverage is going to be a waste of money. Work with your insurance agent to find out if it makes sense for your situation.