Why Keeping Auto Insurance After an Accident Is Important
You were in a car accident and your car is totaled. You can’t buy a new car for a bit, but before you decide to cancel your car insurance, did you know that maintain your insurance coverage during this period is crucial? Here’s why:
Continuous Coverage Keeps Costs Down
Insurance companies look at your insurance history when determining your rates. If there’s a gap in your coverage, even if it’s just for a short time, insurance companies might see you as a higher risk. This perception can lead to higher premiums when you decide to get insurance again. By keeping continuous coverage, you show responsibility, which can help keep your future rates lower.
What Are Your Options?
There is a specific type of auto insurance that is called a Named Non-Owner Policy. It is designed for individuals who don’t own a vehicle but want to keep an auto insurance policy active. The policy provides liability coverage when driving vehicles you don’t own. Liability coverage helps pay for damages or injuries you might cause to others in an accident. It is important to understand, this policy doesn’t cover damages to the vehicle you are driving.
Benefits of a Named Non-Owner Policy
- Liability Protection: If you’re at fault in an accident while driving someone else’s car, this policy helps cover the costs of damages or injuries to others.
- Continuous Coverage: Keeping this policy ensures there’s no gap in your insurance history, which can help you get better rates when you decide to buy a new car and need standard auto insurance again.
A named non-owner policy typically provides liability coverage, but it doesn’t include PIP or PPI. It’s essential to discuss with an insurance expert to understand how this policy fits within Michigan’s specific requirements and to ensure you’re adequately covered.
Conclusion
Even after an accident, when you’re without a vehicle, maintaining auto insurance is a wise decision. A named non-owner policy offers liability protection when driving other people’s cars and helps maintain continuous coverage, which can lead to better rates in the future. If you’re in Michigan and find yourself in this situation, consider speaking with an insurance professional to explore this option and ensure you remain protected.
