Traditional auto insurance follows a simple rule in the event of accidents: Insurance follows the car, not the driver. This means that even if you don't personally have insurance, you can still drive other people's cars that are insured. Conversely, if your car is covered under an insurance policy, then you can lend your car to a friend and he or she will still be covered.
This system works so that every car on the road is supposed to be insured. However, there are times when you might need insurance but don't own a car. This is where non-owner car insurance comes in.
A non-owner policy mostly deals with people who don't drive often and choose to not own a car. Instead of dropping car insurance coverage, you can still remain insured in the event you drive a car in the future. In this instance, insurance follows the driver but not the car. This allows you to use anyone's car and remain insured.
This type of policy is not for everyone and usually purchased by only a small group of people. Its benefits, however, are very important and could be a great option for you. Here are some of the advantages of having a non-owner car insurance policy:
As opposed to buying a standard car insurance policy, non-owner coverage is inherently cheaper because the amount of time spent driving is far less. For those who don't own cars, this can be a great alternative to foregoing insurance altogether because you never know when you might need to use a car in the future.
Perhaps the best reason to have non-owner's coverage is because it serves a unique purpose for those trying to maximize their driving time for as little cost as possible. If you live in a crowded city, then owning a car might not be much of an option. However, small activities like buying groceries or visiting friends can be made much easier with the use of a car. You don't want the responsibility or the expense of owning a car if you only drive infrequently. A non-owner's plan can be great for short-term trips like these.
No car payments
While owning a car certainly has its perks, it could be nice to not have to make monthly payments for years to come. In a sense, you get the best of both worlds: car insurance without car payments. The money saved by going car free could be used for other expenses or to strengthen your current insurance policies.
Rental car coverage
In the event you need to rent a car, many traditional insurance plans do not cover rental cars. An additional, temporary policy would have to be purchased. However, if you hold a non-owner's insurance policy, then you're already covered. This cuts down on the need to continually buy rental coverage every time you want to rent a car for a short period of time.
No gaps in coverage
Despite not having a car, one of the best reasons to have insurance is so that there are no gaps in coverage in the event of an accident. There's nothing worse than having to pay for your own damages or medical expenses because you weren't fully covered at the time. Further, if you choose to buy a car in the future, insurance companies will look at your history and notice that you didn't have insurance for a long period of time. This can seem suspicious and may make you seem like a risky investment, which will lead to higher rates. By having a non-owner's policy, you avoid this whole process, and insurers will know you're a responsible person, thus giving you a better shot at discounted premiums.
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