What non-owned auto insurance is, who qualifies for it, and why it may be a good idea for some drivers to get it.

Sometimes it's a good idea to get auto insurance well before doing this.

What if we were to tell you it might be to your advantage to get auto insurance even if you don’t own a car? Now stay with us here, there’s a method to our madness in suggesting this. There are instances where buying auto insurance before owning a car is actually a good idea.

Many insurance companies fill this need with an auto insurance product called non-owned auto insurance. As the name implies, non-owned auto insurance is auto insurance for people who don’t own a car. It may sound contradictory, but it really isn’t.

What Exactly is Non-Owned Auto Insurance?

Non-owned auto insurance is a liability only auto insurance policy necessarily tied to a driver rather than a vehicle. Because there is no vehicle, there is no full coverage option. Also, only people who don’t own a vehicle are eligible to have non-owned auto insurance. If auto insurance company underwriters find any vehicle titled to you – even if it’s junked and on cinder blocks – your non-owned auto insurance application will likely be turned down flat.

You’ll have to insure that vehicle instead.

Since a non-owned policy follows you, it supersedes any liability coverage that would otherwise apply to the vehicle you may be driving, if any. In other words, if you drive your friend’s car, you don’t have to worry about whether your friend’s liability auto insurance coverage covers you. You have your own. Generally speaking non-owned coverage doesn’t apply to commercial auto insurance situations; that’s a whole other ball of wax entirely.

State liability limit requirements for non-owned auto insurance policies are exactly the same as they are for any other type of personal car insurance. Just because you don’t own a car doesn’t make you exempt from your state’s laws.

Sorry about that.

Good Uses For Non-Owned Auto Insurance

Giving friends and family peace of mind is all fine and good when borrowing their car. But why spend money on auto insurance when you don’t have a car, especially when many auto insurance policies cover third party drivers anyway?

Good question.

For some, that’s reason enough to stay away from non-owned auto insurance. High school and college age drivers who are still on their parent’s policy don’t need non-owned insurance either, even if they don’t have a car to call their own. However, if you’re thinking about buying a car soon and in need of establishing auto insurance history, non-owned auto insurance may be something to consider.

Most standard insurance companies require at least six continuous months of prior insurance history before they will write a policy on you, even if your prior driving history is immaculate. Until then, you have to carry a policy in a high risk or non-standard company. That means higher premiums.

However, since a non-owned policy is necessarily less expensive than a comparable traditional auto insurance policy (reason: there’s no car), it can be a cost-effective way to get the clock started on your auto insurance history sooner rather than later. It counts towards it.

Another reason to consider non-owned auto insurance is for situations such as job applications which require proof of auto insurance. It’s a quick, easy and relatively inexpensive way to fulfill that requirement without visiting a used car lot first.

Why teen drivers have higher insurance premiums, tracking their driving activity, teaching them responsibility, and getting a lower rate when you add them to your policy.

Ever seen a scarier picture than this?

Nothing makes a parent cringe like the thought of their teen drivers.  Them getting behind the wheel of a vehicle, you not being there to control the situation – not to mention the huge jump your insurance premiums are about to take.

But, there are things that parents can do to keep their teen driver responsible and while the insurance increase is inevitable there are ways to make it more manageable.

Higher Rates for Teens

Statistics have shown that teen drivers have a higher chance of getting into an accident than any other group of drivers.  This is due to the lack of experience that teens have behind the wheel and teen drivers are more likely to engage in risky driving behavior – often to show off for friends.

Car insurance for teens is high for a reason. Because the likelihood of an accident with a teen driver is higher, the insurance companies charge a much higher premium to try and offset the cost of an accident if one were to happen.  The more premium that they can collect, the less money they will lose if the teen is in an accident.

Tracking Teen Drivers

Some insurance companies have started programs that allow parents to track a teens driving behavior.  This tracking is made possible by a tracking device that is attached to a teen driver’s vehicle, it can even be placed in such a way that the teen doesn’t know that it is there.  This device can track where a teen driver goes, any erratic and dangerous driver, and also if they go over the speed limit.

If a parent agrees to use a tracking device, the insurance company may decrease the premiums of the teen driver.  Of course, the availability of these programs are different from one insurance company to another, as is the cost of the device and any discounts that the insurance company would allow.

Making Teen Drivers Responsible

Pro-active parenting can go a long way in making sure that teen drivers act responsibly.  First, if you are planning on buying your teen their own car to drive, make them pay for at least half of the vehicle themselves.  Having to work and get the money to pay for something out of their own pocket makes anyone more appreciative of the item that they had to pay for.

With a teen, they are less likely to engage in behavior that could possibly damage or even destroy the vehicle that they had to buy.  It brings a whole different attitude than if you paid for the car and they did nothing to earn it.  It also makes them more likely that they will form the mindset that you will just buy them another one if they destroy the first one.

Make your teen driver pay for their own insurance also.  There is no unwritten parenting law that states a parent must pay for the insurance on their teen driver.  If a teen wants to enjoy the privilege of driving, they are going to have to learn sooner or later that they also have to pay to be able to have this privilege.  This is something that they should learn while they are living with you and you can help them.

Teen Driver on the Cheaper Car

With insurance the insurance coverage follows the vehicle, but insurance rates are based on both the vehicle that is being insured and the drivers on the policy.  With some insurance companies, they base the insurance rates on each vehicle according to which driver is driving it the most.  If your insurance company bases their rates this way, make sure that your teen driver is listed as driving the oldest and least expensive of the vehicles that you own – assuming your company will go for that. Your premium should be lower than it would be if the teen driver was assigned to the most expensive vehicle.

What qualifies as a collector car, how is the car insured, and the restrictions that may apply.

Why you may need a special policy for your classic car.

What is collector car insurance?  It is an auto insurance policy that is specifically designed to cover cars that are not used for everyday transportation and are considered a collector item or a hobby – like classic car insurance.

Collector car insurance is specialty insurance and it is not offered by all companies.  If your current insurance company does not offer this specialty insurance, you may have to seek out coverage with a company that specializes in this type of policy.

What Qualifies as a Collector Car?

Muscle cars, antiques, imports, rare vehicles and street rods all make up part of the list of cars that can be considered for collector car insurance. The vehicles that people pay beaucoup bucks for because they are rare or that they spent years restoring are the most frequently insured vehicles under this type of policy.

Because the term ‘collector car’ can mean so many different things to different people, it is best to contact your insurance company for more information as to whether your car would qualify as a collector car.

Coverage for Collector Cars

Collector cars are not insured according to a certain value that is found in a book.  Collector cars can be rare and the value of the vehicle is generally not something that can be determined to be the same as every other vehicle that was made in the same time period, especially of that time period was a long time ago.

Instead collector car insurance policies use a stated value or an agreed value to determine the worth of the vehicle in the event of an accident.  Stated value is the value of the vehicle that is determined at the beginning of the policy minus any depreciation during the course of the policy up to the time of the accident.

Agreed value is the more popular method of insuring with collector car policies, at the beginning of the policy the person buying the policy and the insurance company “agree” on the value of the vehicle at the time the policy is written.  If there is a car accident and the agreed value was $53,000, then $53,000 is what is paid if the car is totaled, there is no depreciation with this type of value.

Regulating Collector Car Use

How you use your collector car is strictly regulated by the insurance company. This is why they are able to keep the lower rates that you pay for your collector car insurance down.  Driving restrictions include not being able to use the car for everyday use or commuting to work.   More specifically, your insurance company may place an annual mileage limit on your vehicle, usually around 2500 miles a year.

How you store your collector car is also important. You must keep it in an enclosed garage or storage facility that has a lock on it to keep it safe. You also cannot leave it out on the street or in parking lots for long periods of time when you drive it around.  This is to protect the car from theft or vandalism.

In addition, to make sure that the insurance company has a lower chance of having to pay out on a claim they allow only good drivers to start collector car policies with them.  The driver of the collector car has to have been driving for a minimum amount of years and can only have so many at-fault accident and tickets.

Knowing what car insurance is, understanding different coverages, using local agents, and the internet to search for auto insurance.

Looking for car insurance can be a pain - but it doesn't have to be.

Looking for car insurance can be a frustrating process.  You are looking for something that is not tangible (you can’t touch it), you are being forced to buy it (by the state), it can be expensive, and you may not understand what the insurance salesman is telling you. Not exactly a walk in the park.

So where exactly do you start with the whole process?

Understanding Car Insurance First

Before you start the car insurance search, it is in your best interest that you understand what you are looking for.  You can start your education by checking out our car insurance definitions.

Learn the insurance lingo and know what an agent means when they say that the policy has 100/300/50 limits of liability coverage or what rental car coverage is.  If you don’t understand what they are talking about, don’t be afraid to ask.  It is better that you understand what you are buying and that it is a right fit instead of blindly buying something.

Don’t automatically buy the policy with the cheapest rates.  This usually means that you are buying the cheapest coverage as well. It might not provide you with enough coverage if you were in an accident.

For example, when we talked about the 100/300/50 liability limits above, that is the coverage available to cover the damages for the other person if you were to cause an accident.  The 100 is actually $100,000 in coverage for bodily injury (per person) and the 300 is the $300,000 limit that your insurance company will pay for all injuries to the other parties in the accident.  Finally, the 50 is the $50,000 limit that your insurance company will pay up to for damages to property caused by you in the accident.

So if you were to buy a cheap policy because the price was lower and the policy only had 25/50/25 liability limits, if you hit a person that was driving almost any new car out there right now, your $25,000 in property damage coverage would probably not cover the damages.  This means that you are left paying the difference out of your own pocket.

Also by knowing what you are looking for and what is available for insurance coverage, you can make sure that you are comparing policies with the same coverage.  This way you don’t mistake a lower priced policy as being the best value, when it is only the lower price because it offers less coverage.

Local Insurance Search

One way to search for car insurance is through local agents in your area.  This will help you in three ways.  First, they are in your area and you can physically go to their office and talk to them.  This is extremely helpful when you have been in a car accident and have someone there in town on your side instead of just a voice on the other end of the phone.

Second, a local agent knows the laws and coverage requirements for your state.  They will be able to make sure that you are purchasing at least the state minimums and have everything in place for your state.

Third, when you get your first quote for your car insurance a local agent will sit down with you and explain all of the coverages and answer any questions you may have.  They can also get you a quote immediately in writing so that as you go and get your other quotes, you have something in hand to compare it to.

You can also contact an insurance company through a toll free number that they offer on their commercials or print ads.  The phone numbers offer an insurance agent to talk to on the phone that can answer your questions. Bear in mind, these agents are not in your area to offer you local support and assistance.

Using the Internet to Search for Car Insurance

The internet is a great way to conduct your car insurance search.  Quotes can be obtained on your computer screen and you don’t have the pressure of an agent wanting to make a sale.  You also don’t have an agent there to answer any questions you may have or to explain any of the coverages.

We recommend searching for auto insurance through the internet first. It’s faster than calling a bunch of phone numbers, it lets the agents come to you (if you use a quote service like our above quote form), and it’s less hassle than keeping up with company websites or phone numbers.

The minimum auto insurance required for California, reporting your coverage to the DMV, and penalties for non-compliance.

What you need to know when cruising the CA streets.

California car insurance is strictly monitored by the state to make sure that all of its drivers are protected from damage caused by others.

They require minimum insurance to be in place on all vehicles on the road and cars that are not being driven must be registered with the state as in “non-use” or “non-operational” if they do not have insurance in place.  Cars that are being driven without insurance and are not registered as not being used are subject to penalties.

Minimum Insurance Requirements in California

The state of California requires that all of its drivers carry at least liability insurance.  To qualify as acceptable insurance coverage the liability limits have to be no lower than $15,000 in liability coverage for a single person’s injury and $30,000 total for all injuries.  The liability coverage for property damage has to be at least $5,000.

If you are not able to afford liability insurance and still need to drive instead of taking public transportation the state of California does offer a low cost auto insurance that you may be able to qualify for.  For more information on this program visit the website for California Low Cost Automobile Insurance Program at: www.aipso.com/lc

Coverage Reporting In CA

California car insurance policies are required to be reported to the Department of Motor Vehicle electronically by your insurance company.  This is not just something that California asks of the insurance companies that write in their state, it is actually a state law that was put into place so that the state could track their drivers.  It helps the state make sure that if someone is out on the road driving that they have insurance on their vehicle.  They also require drivers in their state to provide proof of valid insurance coverage when they renew the vehicle registration on their vehicle.

Insurance companies are also to electronically report to the Department of Motor Vehicles when an insurance policy has been cancelled.  Once they notify the DMV, the driver of the vehicle has 45 days to report the new insurance that was purchased to replace the cancelled policy.

Penalties for No Insurance in California

If you do not replace cancelled insurance within 45 days, get insurance on a new vehicle within 30 days or California finds that the proof of California car insurance that you provided was not true – they will suspend your vehicle registration.

To get your vehicle unsuspended you will have to provide proof that you placed insurance valid coverage and pay the reinstatement fee.  If your vehicle remains suspended you can get a ticket and could even have your vehicle impounded.  In the worst case scenario, if you get into an accident you will have to pay the liability damages out of your own pocket.

For more information on California auto insurance, contact your local California insurance agent or visit the California Department of Motor Vehicles website at: www.dmv.ca.gov