If you no longer need your car and sell it, but might own one again in the near future (1-2 years), should you maintain a non-owner’s car insurance policy?

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Asked on June 18, 2016 2:58 pm
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Hi Beth,

I have no idea what zipcar requires for insurance, so I cannot speak to that question. Here is some overview information on DC auto insurance: https://www.einsurance.com/insurance-guide/washington-dc/auto-insurance/

In the guide there are links to the DC insurance dept and other resources. My experience is that local agents can be great resources for how local/state law applies. Also in the guide it mentions prior insurance as a factor in determining rates. My recommendation is to check the DMV info and then speak to a local agent when armed with specific questions.

Hope that helps!

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: June 21, 2016 9:13 pm
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Peter Neeves….how would I find out about DC law relating to this? Would zipcar recognize an umbrella policy as adequate? We will compare umbrella and non-owner policies. Thanks!

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Answered: June 21, 2016 2:50 pm
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Some great information posted already but I will add my two cents.

Non-owner policies will cover liability. This may be covered elsewhere. For example, an umbrella policy. Also, if the individual is a named insured on another policy, such as a spouse’s policy, they should not need this extra coverage.

The big issue as I see it is state law. For example, here in New York, a regulator’s heaven, if you have not had automobile insurance in the last six months you go into assigned risk – at much higher premiums – when you come back into the world of the auto-insured. If the premium for the non-owner’s insurance were remarkably low this might be a good way to protect against the exorbitant pricing of the risk pool. Rules like this are state specific and really impact whether or not this type of policy makes sense.

Finally, does the policy provide any protections that an overall umbrella policy would not? And what is the cost differential? If the non-renters provides no additional protection over a liability umbrella at similar rates I would opt for the far broader coverage of the umbrella.

Regards.

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: June 21, 2016 2:43 pm
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Thanks Kathryn. The person I am investigating this topic for has a good history. I was trying to discern whether or not the agent was truly concerned for her or just trying to keep the cash flowing…..

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Answered: June 21, 2016 8:42 am
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Hi! This is a great question. Most of us buy a car in our name and then get auto insurance on it to cover possible damage to the car and damage we are liable for if people are hurt. However, we might drive cars even when we don’t own one…a rental car, a zipcar, a friend’s car. Might we need auto insurance for those events and do they sell non-owner’s policies?

If you don’t own a vehicle, you wouldn’t be able to get the part of the insurance that covers the actual vehicle – the insurance company wouldn’t be able to value and figure the amount you owed them for whatever you drove…it could be an virtually value-less 1991 Honda or a $60,000 Armada. However, you can get a non-owners auto insurance policy that will cover you for the liability of hurting others in whatever vehicle you are driving.

Who might need this insurance? If you rent cars often or borrow friend’s cars, it might be a good choice for you. If you’ve had a DUI, it could be a good idea to keep up insurance even while not owning a car. If you don’t borrow the cars of others but rent cars when you need to drive, you can buy the rental company insurance or use a credit card to covers that insurance as a perk.

With regard to the last part of your question about whether you should keep the insurance for future car ownership, unless you’ve had a particularly troubled driving history, you will probably not have any trouble getting insurance when you get a car again.

Best wishes to you and thanks for writing!

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Posted by Kathryn Hauer (MONEY FORUMS: 0, Answers: 18)
Answered: June 20, 2016 7:32 pm
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