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UPDATED: Aug 1, 2019
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If you’re planning to buy a vehicle or you’re getting your license, you might be wondering when you should go about buying car insurance.
Driving without insurance is a huge gamble. Not only could you get into a serious accident where you’re responsible for paying the damages, you could also face some serious civil and criminal penalties for failing to comply with the state’s vehicle code.
In just an instant, you can have a loss that could affect your entire future. This is why timing is of the essence when you’re buying car insurance.
Read this guide to buying car insurance and learn about automatic coverage provisions, when you’ll need your own policy, and how you can buy insurance when you don’t own a car.
Start comparing car insurance rates now by entering your zip code in our FREE tool above!
Know the State Law
Having insurance is the law. While some states don’t explicitly require insurance, vehicle owners still must prove they are financially responsible in one way or another to comply with the code.
If you own a vehicle, you’re legally required to comply with the compulsory insurance or financial responsibility laws in the state where your vehicle is registered and stored primarily.
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What are the most common state insurance requirements?
The insurance requirements vary from state to state. If you’re going to exercise your privilege to own a car, you’ll need to know what’s required by law and what’s not.
In most states, vehicle owners are only required by law to carry coverage that pays for third-party damages. These requirements are as follows:
- Bodily Injury (BI) – Liability coverage that pays for the medical bills and other related expenses incurred by a third party when they’re damaged in a collision that you cause
- Property Damage (PD) –
Liability coverage that pays to repair real property owned by someone else in an accident that you’re responsible for
Penalties for Driving Without Insurance
If you currently own a vehicle and you don’t have insurance on it, you could be facing some serious penalties for being non-compliant.
The penalties can vary from state to state, but it’s fair to say that most state justice departments are buckling down and assessing stiff penalties to combat the problem of uninsured motorists.
Some of the penalties you might face if you’re caught driving uninsured by law enforcement or by state officials can include:
- Driving infraction and fines
- Requirement to appear in court
- Misdemeanor conviction on criminal record
- SR-22 requirement
- Suspension of driver license or plates
- Reinstate fee for license or plates
- High-risk rates
- Jail sentence
Are you covered to drive vehicles in your household that you don’t own?
Now that you know the requirements and penalties you can face, you might be curious to learn what your insurance obligation is when you don’t own a car.
State officials can’t require you to buy auto insurance when you don’t have a vehicle, but you need coverage if you have regular access to a car.
Auto insurance companies set their own unique underwriting guidelines as to who needs to be listed on a policy and who’s automatically afforded coverage if they have a loss.
If you live in a home with your family or friends and you drive their vehicles, there’s a good chance that the company will want to know about it.
Once the named insured tells the company, you’ll be a driver and covered to drive any listed car. If drivers in the household aren’t listed intentionally, coverage can be denied.
Are you covered as a permissive user?
If you’re borrowing the car of someone who doesn’t live in your home, the situation is a bit different. You don’t need to be listed as a driver if you’re not a household member and if you don’t have regular access to the car.
In many cases, as long as you’ve been given permission to drive the car, coverage will extend to cover liability claims and also physical damage claims if coverage is carried.
This is called the permissive use status on a personal auto policy and stipulations vary from company to company.
Can you get insurance if you don’t own a car?
If you don’t own a car but you often rent or borrow cars, it’s best that you’re covered. Rental car companies will provide you with liability coverage for a fee, but the fee is often charged daily.
It’s free to get permissive use coverage under a friend’s policy, but you’re not guaranteed coverage in every situation.
It can benefit you to buy a non-owners car insurance policy that will provide you with liability protection whenever you’re driving a rented or borrowed car you don’t always have access to.
This special kind of policy isn’t a legal requirement in most cases, but it will offer you peace of mind and asset protection if you’re ever in a crash.
What to Do When You’re Buying a Car
If you’re buying a car and you don’t have existing coverage, you’ll need to start shopping for coverage to ensure you’re insured as soon as you drive off the lot.
It’s your legal obligation to insure vehicles that you own or that you’re financing/leasing. The obligation transfers from the owner or lessor the moment you sign the ownership papers.
This is why you should start to price the cost of coverage for various models before you even go to a dealership lot.
Do you have automatic coverage?
Individuals with existing insurance may have automatic coverage on a new car for 14 to 30 days. If you’re just a driver and not a policy owner, you’re not given this coverage extension unless the policy owner co-owns the car.
This is why you shouldn’t rely on newly acquired vehicle provisions.
If you’ve discovered that you should have insurance, it’s time to start price shopping. You can get quotes by calling insurers directly or you can use an online tool that gives you access to quotes instantly.
The online brokerage-style tools can give you an accurate picture of pricing while saving you time.
Start entering personal information, select the coverage options you want, and then you can get your application prepared for when you need insurance.
Compare car insurance rates now by using our FREE tool below! Enter your zip code to get started now!