There are several reasons why a person with no car might need to buy car insurance. Below is a list of the 3 most common reasons to buy non-owner car insurance.
Reason #1: To Satisfy The Court Or DMV
This is the most common reason that you would want or need the nonowner policy. In this scenario, you have been told to provide “financial responsibility” to keep (or get) your license.
You got a DWI a few months ago and lost your license. Since you are no longer driving, you have decided to sell your car. When it comes time to get your license reinstated, the state will require you to file the sr22 form. The only way to get an sr22 is to have an insurance policy and if you no longer own a car – the nonowner policy is a cheap option.
It may seem odd that insurance is needed for a person that has no car and no intention of driving. But in this scenario, the non-owner policy with an sr22 will help you get your license.
You have never owned a car, but last year you borrowed a friend’s car and got into an accident. Unfortunately, your friend did not have his car insured. Consequently, you (and your friend) both lost your licenses.
The state is now requiring you to show proof of insurance before they will allow you to get reinstated. In this scenario – the non-owner policy should do the trick.
Insider Tip: Even if you have a non-owner policy, make sure that any car you borrow has proof of insurance in the glove box.
Reason #2: In Between Vehicles
Then second most common reason to buy a non-owner policy is to keep your prior coverage discount – which is the single biggest discount available.
You have had car insurance for a long time and have always had a decent rate. A few weeks ago, you hit a herd of deer and totaled out your only car. Although you are searching for a new car, you haven’t found one yet.
Don’t completely cancel your car insurance while shopping for your next car. The biggest discount is for having continuous coverage. Instead of paying for a bunch of coverage that you don’t need, just get a non-owner policy until you find a new vehicle.
Insider Tip: Try to buy a non-owner policy that will allow the addition of a vehicle later.
Reason #3: Required By Employer
The third most common reason for a non-owner policy is to get or keep a job.
You are a college student living on campus and don’t have your own car. You pick up a part time job that wants you to show that you have liability auto insurance.
Although the employer should have business auto insurance to provide primary coverage if something happens, they have asked you to show proof of auto insurance in order to work there.
Nobody likes to pay car insurance. This is especially true for those that don’t own a car or don’t drive very often. But as we have seen here, there are logical reasons where it might make sense.
These policies are not handled by all insurance carriers. They contain many exclusions so it is important to understand what is not covered by the non-owner policy.
If you have questions about sr22 or non-owner type insurance, it is suggested to speak with a specialist.