An Overview Of Three Forms Of Unconventional Car Insurance

Auto insurance is available in several forms. Analyze your insurance needs and choose the best that meets your needs. Below are three forms of car insurance to consider if your insurance needs are unconventional. 

1. Non-Owner Insurance

Conventional car insurance is only necessary for people with cars. However, insurance companies know that even those without cars may drive and experience accidents. The insurance industry has come up with non-owner car insurance for such people. For example, you may need non-owner car insurance if you sometimes borrow friends' cars.

Non-owner car insurance follows the driver/insured and does not attach to a specific car. Standard non-owner car insurance covers third-party liability. The coverage doesn't apply to first-party car damages in case of a crash. Some insurance companies allow you to add uninsured/underinsured motorist coverage and/or medical payments/personal injury protection.

2. Telematics Insurance

Conventional car insurance requires you to pay an annual fee in exchange for compensation in case of a covered loss. The insurance company calculates your rates based on the information you provide when buying coverage.

On the other hand, insurance companies determine rates for usage-based car insurance based on your driving habits. The insurance company installs a telematics device in your car that collects and transmits various data, such as:

  • Your driving speeds
  • Your braking and acceleration patterns
  • Your driving frequency
  • Your driving mileage
  • Your typical driving hours

Telematics insurance is best for safe drivers who rarely drive.

3. Classic Car Insurance

With conventional insurance policies, your insurance company calculates your car's market value based on the cost of comparable models. The initial car cost, depreciation, make, model, and condition determine its market cost. The market cost is the maximum compensation from the insurance company if you lose the car.

Classic car insurance doesn't work that way because they are rare, and getting comparable costs is difficult. Repairing classic cars is also difficult, and some do not have readily available spares. As such, you agree with your insurance company on the insurance limit when buying classic car insurance.

Classic car insurance has limits you should know before buying coverage. The limits vary by the insurance company, but many companies limit how often or how much (in terms of mileage) you can drive the car and still maintain its classic insurance.

Talk to your insurance agent to help you customize your insurance policy. Many insurance companies will allow you to buy a standard liability policy and customize it with relevant add-ons or riders.