Do I Need Car Insurance?

Woman Wearing Eyeglasses Sitting In Car
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Car insurance is always required if you own and operate a car on public roads. Some situations might leave you wondering whether you need it. For example, what if you don't have a car? Learn more about when you need auto insurance.

When You Don't Own a Car

Not owning a car may lead you to believe you don't need car insurance. If you're a licensed driver and planning on driving any vehicles, car insurance is still required. You may not own a car at the moment, but you should still retain some car insurance for the following reasons:

  • You may need liability insurance. Coverage for liability may not be necessary if you never get behind the wheel of a vehicle, but if you ever drive someone else's car, you could be found liable in the event of an accident.
  • You may need coverage for medical in case of injury in a car accident. Sometimes primary health insurance carriers will cover injuries in car accidents, but more and more health insurance companies exclude car accidents.
  • You avoid high-risk rates when purchasing your next vehicle. Lapsing your car insurance for just about any reason means you will be high risk the next time you buy 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 non-owner car insurance policy, which is cheaper than a traditional car insurance policy but still provides coverage for liability. Non-owner policies don't cover physical damage to any vehicle.

When You're Leasing a Car

If you are leasing a car, you need car insurance. Technically, you don't own a leased vehicle, but you're responsible for insuring it while it's in your possession. Not only is insurance required, but you’ll need to have full coverage. 

Gap insurance is also highly recommended and often required when leasing a car.

When You Can't Afford Insurance

It can be challenging to manage the high cost of car insurance premiums, but it's essential to make car insurance one of your highest priority bills. It's against the law to drive a car without insurance in most states.

If you’re having a tough time financially, you can 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. An accident, traffic violation, or high-risk insurance rate will leave you wishing you had just kept your car insurance.

When You Can No Longer Drive

Even when you are sick or disabled for an extended period, you should maintain car insurance if you plan on driving again. Retain coverage on your vehicle, especially if you are having other people drive it. Another option is to 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 plan will also provide you with necessary medical coverage in case of a car accident.

When Your Car Breaks Down

If you only have one vehicle and it's broken down, you'll still need to keep car insurance. Hopefully, your car will not be down for long. Extending coverage to a car needing repairs for a couple of weeks is cheaper than purchasing a high-risk policy due to a lapse.

When You're Between Cars

It works the same way if you're between cars for a short period. You're better off lowering your coverage to the bare minimum and keeping up with the payments rather than 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. If that's not an option, consider a non-owner policy to keep your coverage intact until you find your next car.

When You're Deployed

Active duty military personnel are not required to have car insurance while deployed overseas if no one is driving the vehicle. A family car that will be driven by family at home will still need to be insured. This exception is for single people or spouses who are both deployed and leaving their vehicles behind. A returning military service member is not considered high risk when purchasing car insurance again.

The Bottom Line

It's rare not to need car insurance. It's 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 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 get insurance in the future.