How to Buy Car Insurance When You Don't Own a Car

Even if you do not own a car, it may be a good idea to consider purchasing car insurance. The rules for buying this type of insurance are slightly different that for car owners, but the protection is the same. If you plan to frequently drive a car, having your own insurance just makes sense. Knowing a few tips will help you to make good choices when selecting your insurance.

Insurance companies sell non-owned auto insurance to cover people who drive but do not own a car.

This type of insurance will offer you the same protection that car owners have. Just because a car owner has car insurance does not mean that you will be covered when you are driving that car. Their policy may exclude certain types of drivers. If you are unlucky enough to be one of the excluded drivers, you may be driving around without being insured. The worst time to discover that you are uninsured is immediately after an accident.

Decide what type of driving you plan to do.

If you are doing pleasure driving in a family member or friend's car, you need a policy that will cover the car repairs for that car plus the other car or property involved in the accident. You do not want to lose a friendship or become estranged from a family member over a car that you cannot afford to repair. By the same token, you do not want to violate the law by driving without adequate liability insurance.

Discuss your situation with a few insurance agents.

It is always best to comparison shop for any type of insurance policy. Prices can vary widely from company to company. Since non-owned auto insurance covers the same types of losses, the costs will be based on the same insurance needs. The main difference to consider is that you may drive much less and less frequently than many car owners. This will work to get you lower rates.

Get coverage large enough to protect your financial position.

On the collision side, you need enough to repair or replace the car. However, on the liability side, you will need enough coverage to pay off large liability judgments so that you are not forced into bankruptcy if an accident occurs. If the car you intend to drive is rented, the rental agency may have rules regarding the minimum amount of insurance you need to carry to fulfill the rental agreement. You also must still meet the minimum liability mandates for your state of residence.

Buy insurance for a term that meets your needs.

If you only intend to be using the car for a few weeks or months, purchase a policy that provides insurance only for the term required. Your company may require that you agree to a one-year policy with a cancellation clause. This will work well in most cases if it does not penalize you too severely for that right.