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Insurance on a license, often known as non-owner car insurance, covers individuals who don’t own a car but still drive occasionally. It’s a good choice for those renting cars, using car-sharing services, or having a suspended license due to violations.

It provides liability coverage, which pays for injuries or damage you cause to others in an accident. However, it doesn’t cover the vehicle you’re driving but focuses on protecting you from unexpected expenses.

What is insurance on a license?

Insurance on a license is a policy that provides liability coverage to individuals who drive but do not own a car. This coverage kicks in when you borrow or rent a vehicle and are involved in an accident.

This type of insurance is ideal for people who frequently rent cars, borrow cars from friends or family, or use car-sharing services. It’s also useful for individuals who have a driver’s license but don’t currently own a vehicle.

Difference between insurance on a license and regular car insurance

Regular car insurance is tied to a specific vehicle and covers the policyholder’s vehicle for various risks like collisions, theft, and damage. On the other hand, non-owner car insurance is tied to the individual driver rather than a specific vehicle. It provides liability coverage when the insured person drives a car they don’t own.

Insurance on a license covers damage and injuries to others if you are at fault in an accident while driving a car you don’t own. It includes bodily injury and property damage liability.  Regular car insurance requires the policyholder to own or lease a vehicle, whereas non-owner insurance does not.

Final thoughts

Insurance on a license is a valuable option for drivers without a car, offering liability coverage for occasional driving. Regular car insurance, on the other hand, provides comprehensive coverage for vehicle owners, protecting against a wide range of risks. Just like any other financial decision, it’s best to compare options and talk to an insurance agent to determine the best choice for your needs.