Do You Need Insurance if You Have a License but No Car?

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Car insurance is required by law. But, you don’t necessarily need a car to drive – all you need is a license. What if you have a license but no car, do you still need coverage? How would you get it if you do? Let’s go over when you need car insurance when you don’t have a car, and how much it might cost you.

Do You Need Insurance if You Have a License but No Car?

You’re not required to have insurance if you have a license but no car, but it depends on how often you drive other people’s vehicles. If you’re borrowing cars on occasion, you should be covered under the vehicle owner’s insurance. But, if you borrow or rent cars regularly, you might want to look into non-owner car insurance.

Every state except New Hampshire and Virginia mandates a minimum amount of liability insurance you need to have to drive your car. You can’t own and operate a vehicle without insurance. But, if you don’t have a car, you have no vehicle to insure. So, you don’t necessarily need car insurance to drive. You need it to buy, own and use a car regularly.

If you live with someone who owns a car, like a relative or spouse, and they own a car with an accompanying insurance policy, you should be listed on their plan to receive their coverage. When giving policies, providers typically require all members in the policyholder’s household to be named. Insurance companies believe that anyone you live with is likely to drive your car at least semi-regularly. 

By having all drivers in the house listed on the policy, the carrier can fully understand the risks of covering the policyholder and charge the proper premium. For instance, living with someone who has a DUI will likely raise your rate, as that person is riskier to cover.

If you live on your own and drive a friend’s or relative’s car from time to time, you should receive coverage under the vehicle owner’s plan. Car insurance generally follows the car, not the driver, so when you borrow someone’s car (with the owner’s permission), insurers usually have no problem covering you temporarily while driving.

Also, you should be able to rent cars every so often without an issue as you can purchase liability coverage from the rental agency when you get the car. 

When Do I Need Car Insurance if I Don’t Own a Car?

The primary instances when you’d need car insurance without a car is if you’re borrowing your friend’s car, or renting cars, several times a month or more. For example, let’s say you borrow your neighbor’s car weekly to get to work. You may want to look into non-owner car insurance in this case.

The ability to be covered under someone else’s insurance while you’re driving their car, called permissive use, has its limits. Insurers don’t want to regularly be covering someone who isn’t on the policy. If you find yourself borrowing or renting cars constantly, you should get non-owner car insurance to be covered.

Non-owner car insurance is just what it sounds like. It provides liability coverage to protect other drivers on the road from damages you may cause. It doesn’t pay for repairs of the vehicle you’re driving because you don’t own the car you’re using.

Not only is non-owner car insurance useful if you rent or borrow cars consistently, but it may also come in handy if you’re between cars but don’t want your coverage to lapse. Allowing a car insurance policy to expire without getting a new one is a red flag for insurers that can make it more costly to get coverage in the future. Non-owner car insurance is a way to maintain a policy without a car.

How Much Is Non-Owner Car Insurance?

Non-owner car insurance is usually cheaper than car insurance with a car, but it depends on a few factors, like your driving history and location. You might expect to pay somewhere between $20 and $80 per month for non-owner car insurance, with a high-risk driver being on the more expensive end.

The cost of non-owner car insurance also depends on how much liability coverage you choose. If you opt for your state’s minimum required amount, you should pay less. But, if the damages in an accident you cause exceed your policy limit, you’ll be personally liable for the remaining bill.

Some states require more liability coverage than others, which directly influences how much you’ll pay. Also, if you’ve accumulated a lot of tickets, accidents, or auto claims in the recent past, you’ll likely pay more. Having any DUIs can also significantly raise your rate.

How Can You Get Car Insurance Without a Car?

Many of the largest car insurance carriers offer non-owner car insurance. Which company is best for you depends on your location and needs. The cost of non-owner coverage varies by insurer, so you should still compare rates from multiple companies to see who has what you need at the best price.

You may not be able to get a non-owner car insurance quote online like you can with other policies. You usually need to call the company. To get a quote, you’ll need a valid driver’s license.

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The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

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