Car-Free Auto Insurance: Is It Possible?

Yes, you can get auto insurance without owning a car. This is known as non-owner car insurance and it provides liability coverage for drivers who don't own a vehicle but drive regularly using borrowed cars, rental cars, or car-sharing services. Non-owner car insurance is typically cheaper than standard insurance policies and is a good option for those who frequently rent or borrow cars and want to avoid paying for rental companies' liability insurance. This type of insurance covers the costs of damages and injuries caused to others in an accident but does not cover damage to the insured's vehicle or their own injuries.

Non-owner car insurance

In some states, such as Texas, non-owner car insurance is required to legally drive another person's car. It is also important to note that non-owner car insurance cannot be purchased if you live with someone who owns a car; in this case, you would need to be listed as a secondary driver on their insurance policy.

The cost of non-owner car insurance varies depending on factors such as driving history, location, and the amount of coverage desired. In Massachusetts, the average cost is around $700 per year, while in New York, the average is $75 per month.

Cheaper than standard insurance

Non-owner car insurance is a good option if you don't own a car but drive rented or borrowed cars often. This type of insurance provides liability coverage for bodily injury and property damage, meaning that it will cover you if you're liable for damages or injuries in an accident. It does not, however, cover damage to the vehicle you're driving or your own injuries. Non-owner insurance policies also tend to be less expensive than standard car insurance policies.

• Borrowing cars often: If you often borrow a car and don't have your own policy, non-owner insurance can provide liability coverage beyond what the car owner's policy provides.
• Using a car-sharing service: Non-owner insurance can be useful if you frequently use car-sharing or short-term rental services, as these services often only provide minimum liability coverage.
• Renting cars often: Non-owner insurance may be cheaper in the long run than purchasing liability coverage from the rental company each time you rent a vehicle.
• Maintaining continuous coverage: Going without auto insurance, even for a short period, can make you look risky to insurers, leading to higher rates in the future. Non-owner insurance can help you maintain continuous coverage at a lower cost.

It's important to note that non-owner insurance may not be necessary if you only borrow or rent a car occasionally, as the car owner's insurance policy may already provide sufficient coverage. Additionally, non-owner insurance does not include collision or comprehensive coverage, so it won't cover damage to the vehicle you're driving.

The cost of non-owner insurance can vary depending on your age, driving record, location, and other factors. It is generally significantly lower than the cost of a traditional car insurance policy.

When you don't own a car

There are many reasons why you might not own a car. For some, it's a financial decision, while for others, it's a lifestyle choice. Here are some common reasons why people choose not to own a car:

• Inefficiency: Cars are parked 96% of the time, and with the rise of ride-sharing and mobility services like Uber, Lyft, and GoDrive, owning a car is no longer necessary. These services offer Transport as a Service (TaaS), providing you with mobility without the hassle of ownership.
• Cost: The cost of owning a car is high and includes expenses such as the purchase price, depreciation, fuel, fines, and more. Renting a car by the hour can be a more economical choice, as you only pay for what you need.
• Millennial Mindset: Many millennials live in large cities with heavy traffic and expensive parking. They prefer to work close to home and rely on ride-sharing services, avoiding the hassles and costs of car ownership.
• Self-Driving Cars: With advancements in technology, self-driving cars are becoming a safer alternative to human drivers. Governments may even ban human driving in the future, as 90% of road fatalities are caused by human error.
• Freedom: Some people view car ownership as a symbol of freedom, but this can be an illusion. True freedom may lie in the ability to choose and pay for the vehicle you want without being tied down by ownership.

If you don't own a car, you might still need auto insurance, especially if you plan to drive. Non-owner car insurance is a type of coverage that provides liability protection for bodily injury and property damage when driving a car you don't own. This type of insurance is ideal for those who borrow or rent cars frequently, use car-sharing services, or want to maintain continuous coverage to prevent future rate spikes. It's important to note that non-owner insurance doesn't cover damage to the vehicle you're driving or your own injuries in an accident.

When you borrow or rent cars

If you borrow or rent cars, you may want to consider getting non-owner car insurance. This type of insurance is a good option if you don't own a vehicle but regularly borrow or rent other people's cars. Non-owner car insurance can also be useful if you need to file an SR-22 form with your state, which may be required to reinstate your driver's license after a serious conviction like a DUI.

Non-owner car insurance provides liability coverage for bodily injury and property damage, meaning that it will cover you if you're liable for damages or injuries in an accident. It does not cover damage to the vehicle you're driving or your own injuries after an accident. This type of insurance tends to be less expensive than standard car insurance policies.

If you borrow cars often, non-owner insurance can provide additional liability protection. It can also be helpful if the car owner's liability limits are too low to fully cover an incident, or if you're denied coverage under the owner's policy.

When renting cars, non-owner insurance might be a cheaper option than purchasing liability coverage from the rental company every time. However, it won't cover any physical damage to the rental car. You may be able to buy a collision damage waiver from the rental company to add to your liability coverage from the non-owner policy.

If you frequently use a car-sharing service, a non-owner policy can provide additional liability coverage beyond what the company provides.

In summary, if you borrow or rent cars frequently, non-owner car insurance can provide valuable liability protection and may be more cost-effective than other options. However, it's important to note that it does not cover damage to the vehicle you're driving or your own injuries.

Maintaining continuous coverage

Insurance companies like to see consistency, and they reward those who have maintained consistent coverage. Continuous coverage also helps you avoid legal troubles, as the majority of states require a minimum amount of auto insurance coverage. If you get into an accident while uninsured, you will have to pay out of pocket to fix the vehicle, and you may face legal consequences.

Additionally, having continuous coverage can help you avoid significant increases in your premium rates. When you have a long, unbroken history of insurance, insurance companies will offer you lower rates. This is because they view individuals with uninterrupted coverage as less risky.

Continuous coverage also provides financial protection. If you have a lapse in coverage and get into an accident, you will be responsible for any damages caused. This could result in financial hardship, especially if you are unable to pay for the repairs or injuries that you caused.

Furthermore, maintaining continuous coverage can be beneficial if you need to file an SR-22 or FR-44 form with your state. These forms may be required to reinstate your driver's license after a serious conviction, such as a DUI. By having continuous coverage, you can prove that you have the minimum amount of insurance coverage mandated by your state.

In summary, maintaining continuous coverage can help you obtain lower insurance rates, avoid legal issues, protect your finances, and ensure you meet the necessary requirements to keep your driver's license. It demonstrates to insurance companies that you are a responsible individual, which can result in better rates and coverage options.

Frequently asked questions