Do I Need Car Insurance?

Two men arguing about damaged cars
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Car insurance is always required if you own and operate a car. It is common for people to ask, but what if? An endless amount of circumstances can be played out to warrant the question, do I need car insurance?

I Don't Own a Car

Not owning a car may lead you to believe you do not need car insurance. However, if you are a licensed driver, car insurance is still needed. You may not own a car at the moment for many possible reasons.

Being a teen driver, the economy or your urban location may get in the way of car ownership. You should keep some car insurance for the following reasons.

  • You may need liability. Coverage for liability may not be necessary if you literally never get behind the wheel, but if you ever drive someone else's car, you could be found liable in an accident.
  • Even car passengers need coverage for medical. Coverage for medical in case of injury in a car accident is important. Sometimes primary health insurance carriers will cover injuries in car accidents, but more and more health insurance companies exclude car accidents.
  • Avoid high-risk rates when purchasing your next vehicle. Lapsing on your car insurance for just about any reason means you will be high risk the next time you go to purchase car insurance.

One way to help you stay covered while you don't own a vehicle is to be added as a driver to a friend or family member's policy.

Another would be to purchase a Named Non-Owner car insurance policy which is cheaper than a traditional car insurance policy but still provides coverage for liability. Named Non-Owner policies do not cover physical damage to any vehicle.

I Lease a Car

If you are leasing a car, you definitely need car insurance.

Technically you do not own a leased vehicle; however, you are responsible for insuring it while it's in your possession. Not only is insurance required, you need to have full coverage. Gap insurance is also highly recommended and often required when leasing a car.

I Can't Afford Car Insurance

It can be difficult to manage the high cost of car insurance premiums. It's important to make car insurance one of your high priority bills. It's against the law to drive a car without insurance. Reduce your coverage to the bare minimum, shop for cheaper car insurance rates, and avoid extra service fees by paying on time. In the long run, canceling your car insurance will not save you money. A potential accident, traffic violation, or high-risk insurance rate will leave you wishing you had just kept your car insurance.

I'm Sick and Can't Drive

Even when you are sick or disabled for a long period of time you should maintain car insurance. Retain insurance on your own vehicle especially if you are having other people drive it. Or, get listed as a driver on a friend or family member's policy to avoid high-risk rates in the future. Being listed on someone else's policy will also provide you with the necessary medical coverage in case of a car accident.

My Car Broke Down

Similar to the other scenarios, if you only have one vehicle and it is broke down you'll want to keep car insurance on it. Hopefully, your car will not be down for long. Extending coverage to a car needing repairs for a couple weeks is a whole lot cheaper than purchasing a high-risk policy due to a lapse.

I Sold My Car and Have Not Found a Replacement

It works the same if you are in between cars for a short period of time. You are better off lowering your coverage down to the bare minimum and keeping up on the payments verse canceling your policy. An alternative here would be to get listed as a driver on a friend or family member's car insurance policy until you find a replacement.

I'm Deployed in the Military

Active duty military personnel are not required to have car insurance while deployed overseas.

A family car, still driven by the family at home will obviously still need to be insured. This exception is for single people, or a husband and wife both deployed and leaving their vehicle behind. A returning military serviceman is not considered high risk when going to purchase car insurance again.

As you can see, it is rare not to need car insurance. It is every licensed driver's responsibility to maintain some form of car insurance. Whether it's being listed as a driver on someone else's policy or taking out a Named Non-Owner policy, at least you know you'll be covered. And you won't be forced to pay sky-high insurance rates when you go to get insurance in the future.