It seems simple: why would I have auto insurance if I don’t own a car? Or if I’m storing it for a long time? That’s a waste of money! Believe it or not, it may make sense to maintain your auto insurance, depending upon your future plans.
Of course most of us know better than to cancel our auto insurance when we own a vehicle. It’s illegal to drive without insurance in Maine, and foolishly risky everywhere. But there are cases when responsible people consider letting their Maine auto insurance lapse.
You’re Not Going to Use Your Car for a Long Time
You’re going on a long trip, sabbatical, or a semester abroad. Your car will be parked while you’re away. It’s tempting to save money by canceling your auto insurance, and start it up again when you return. Here are some things to keep in mind.
- Someone may need to borrow your car.
- You may want someone to drive it occasionally to keep it lubricated, rotate the tires, and prevent animals from nesting in it (it happens).
- Things can still happen to a parked car. Trees fall, garages collapse, cars get stolen, vandalized, or damaged by people parking next to it.
You’re Selling Your Only Vehicle
Our Portland Maine area insurance agency recommends that you at least consider a “named non-owner” policy – especially if you’re likely to be without a car for less than a year. Here’s why:
1) You Might Drive Someone Else’s Car. In the U.S., you’re borrowing someone’s insurance when you borrow their car. But do they have any? If so, how much? Without a named non-owner policy, you would be personally liable if they don’t have insurance, or don’t have enough to pay for the damage you cause.
2) You Could be Hurt as a Passenger, Pedestrian or Cyclist. Your auto insurance provides medical payments coverage in case you are hurt in a car accident. This applies whether you’re a pedestrian, passenger or cyclist. A $5,000 limit would probably be enough to cover your medical insurance deductible.
3) You might rent a car. A Maine named non-owner policy would provide liability coverage for vehicles rented in the U.S. You’d still want to buy the Collision Damage Waiver coverage offered by a rental agency, but wouldn’t need to buy their liability insurance.
4) You’ll Pay a Much Lower Rate When You Do Buy Another Vehicle. Insurance companies charge a higher premium if you have not had continuous liability insurance. People who have a lapse of more than 30 days typically pay a surcharge, and are ineligible for most preferred insurers’ policies until they’ve had continuous insurance for a year.
What is “Named Non-Owner” Auto Insurance, and What Does it Cost?
Named non-owner auto insurance provides only liability, uninsured motorist and medical payments coverage. It’s designed for people who don’t own a vehicle, but may drive other vehicles, such as rental cars, business fleet cars, or friends’ or relatives’ vehicles. It covers only the people who are specifically listed on the policy.
Named non-owner auto insurance costs less than regular auto insurance. Rates vary, but are often about 50% of the cost of liability insurance for an owned vehicle. For example, if your current insurance costs $900, and $300 of that is physical damage (“comprehensive” and collision) coverage, a named non-owner policy might cost about $300 per year.
Think about whether these situations might apply to you, and discuss it with your agent. To compare up to 6 Portland, Maine area auto insurance quotes in 10 minutes, visit our web site, or call Noyes Hall & Allen at 207-799-5541.
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