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SBAAA Car Insurance

Insurance for Non-Car Owner

Q: I live in the city and rely on public transportation, but I occasionally borrow or rent a car for trips to the city. Should I have an auto insurance policy?

Answer:

With the rising cost of fuel, insurance, and automobiles, more and more urban Americans are choosing to use public transportation for day-to-day travel. But when it's time to flee the city, you probably find that a car is the easiest way to get where you want to go. If you drive at all, it's a good idea to have an automobile insurance policy--even if you don't own a car.

Many insurance companies offer a "nonowners policy" for people who drive occasionally but don't own their own car. Nonowners policies typically include liability, medical payments, and uninsured/underinsured motorist coverages. Nonowners policies generally do not include comprehensive, collision, towing reimbursement, or rental reimbursement coverage.

You can get approximately the same coverage if you buy the limited coverage offered by car rental companies. But if you rent a car for more than, say, 10 days per year, buying a nonowners policy is usually more cost effective. A typical nonowners policy will cost from $300 to $500 per year, depending on where you live, your driving record, and various other factors.

What's more, a nonowners policy provides coverage for any car you drive, not just rental cars. If you borrow a car from a friend and get into an accident in a borrowed car, your friend's insurance would kick in first. But if, for example, the accident was your fault and the damage to the other driver's property exceeded the liability limits on your friend's policy, your nonowners insurance policy would cover the excess (up to policy limits).

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