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It is fairly common knowledge this day and age that auto insurance is a must for anyone who owns a vehicle. What is less obvious is the need for auto insurance coverage if you do not own a vehicle. While legally auto insurance is not required if you do not own a vehicle, there are some serious downfalls to driving a vehicle without coverage.

Often it is considered a waste of money to carry auto insurance coverage if you do not own a vehicle. While that makes sense on the surface, there is actually quite a bit of money and hardship that could be saved by carrying an insurance policy without a vehicle.

What is Non-Owner Insurance?

An auto insurance policy that includes a driver but no vehicle is called a “Named Non-Owner” policy. This policy will offer coverage for a driver who does not own a vehicle but elects to or is offered the opportunity to drive a vehicle. For instance, a vehicle loaned to them by a friend of family member. If a driver is to operate a barrowed vehicle and is in an accident, and the driver does not have a policy of their own, the burden of that accident and all of the financial pitfalls are passed to the owner of the vehicle. Without a doubt increasing their insurance rates for minimum of three years.

In addition to avoiding passing financial burden to someone who was generous enough to lend their vehicle, there are additional benefits as well. Most are unaware how important continuous insurance coverage has become to insurance companies. All companies will inquire as to whether or not a driver has had continuous insurance coverage for 6 months without ANY lapse. If a driver has not, they will experience much higher insurance costs and with some insurance carriers will even be denied a policy.

Penalties When Driving Without Insurance Coverage

Insurance companies assess these penalties because without a continuous insurance policy in place there is no way to gauge a driver’s history. Being able to verify previous insurance records allows companies to determine eligibility, offer an appropriately priced policy, and ensure a driver meets all minimum risk requirements. Guidelines like this are in place to ensure an insurance company can maintain the most competitive rates available for customers that already have an insurance policy in place.

Essentially, it is important to consider carrying an insurance policy at any stage in life if there is even a slight possibility that driving a vehicle may occur. Even the smallest lapse of coverage can cause financial hardship and years of burden for yourself and those around you.

Give us call or start your Allied Insurance Quote today!

Allied Insurance at The Insurance Loft

1630 Welton St. Suite 530
Denver, Colorado 80202
1 (888) 688 1446

By Brian Cook