Do I need car insurance if I don't own a car?
I don't own a car because I can borrow my friends' and roommate's cars to drive. So I don't have any need for my own car insurance, right?
Here's a scenario: You borrow your roommate's car to run down to the neighborhood pizza joint to pick up dinner. On the way, your roommate calls your cell phone to tell you not to forget to double check if they put the anchovies on. You fumble with your cell phone and take your eyes off the road for just a split second. A pedestrian steps out into the crosswalk and becomes your new hood ornament. Did we forget to mention that your roommate let their car insurance lapse the week before?
Since you don't have your own car and didn't think you needed your own insurance policy, you are now faced with paying all the pedestrian's medical bills, pain and suffering, loss of consortium, and any other damages their attorney can pin on you. Since you don't have your own coverage and your roommate let their coverage lapse, you will spend the rest of your life paying for that split second when you took your eyes off the road.
The solution to this problem is an endorsement called Named Non-owner Coverage. This endorsement can be used on a car insurance policy even though there are no vehicles on the policy. The endorsement provides bodily injury and property damage liability, medical payments coverage, and uninsured/underinsured motorists coverage just like any other car insurance policy.
Another benefit of a named non-owner policy is if you decide to buy a car, you have newly acquired auto liability coverage for up to 14 days without notifying your insurance company. You do not have physical damage coverage for a new vehicle however, so make sure you notify your company preferably from the car dealership if you want that coverage.
The named non-owner policy can also be used if you are trying to buy a personal umbrella policy but do not own any vehicles. Most insurance companies will require verification of underlying personal auto coverage.
Coverage does not apply to spouses or family members under the named non-owner endorsement unless that option has been selected on the endorsement.
If you don't own a car, but often drive other people's vehicles or rent cars, you should look into a named non-owner car insurance policy. You can't control other people's actions (such as paying their car insurance) so by buying your own policy, you will know you have coverage in place if needed.
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