Question

Do you need car insurance?

You need car insurance if you own a car or drive borrowed or rented cars frequently.

Car insurance is mandated by state law for those who own a car or drive others’ cars regularly. Therefore, anyone who has a valid license and drives needs to possess car insurance with minimum coverage. Even if you don’t own a car, it is best to secure non-owner’s insurance.

Car insurance you need based on ownership

Based on the nature of ownership, the car insurance types vary. Here are some of the important auto insurance terms you need to know.

Liability insurance

This is mandatory insurance in most states in the US. It is illegal to drive a car without state-wide insurance. The policy is meant to cover compensation for property damage and bodily injury to the third party in the event of an at-fault accident.

Comprehensive coverage

This is optional coverage, based on your needs. The policy is meant to cover the financial loss due to both own damage and damage to a third party. There is no mandatory minimum coverage for the own damage part. As the term suggests, own damage solely covers the financial loss due to the repairs and replacement of damage to your car.

Non-owner’s insurance

You need non-owner insurance when you don’t own a car and still drive a borrowed or rented car regularly. The insurance is typically liability coverage and kicks in only when the liability exceeds the owner’s coverage limits.