Many folks get a drivers license – but don’t own a car. There are also a lot of younger drivers that go away to college and they keep their drivers license but don’t take a car with them. Did you know that if you have a license you are required by law to have auto insurance? Regardless if you do or don’t own a car – you are still required to carry insurance. When you go to the BMV and sign the forms for your license one of those forms is “Proof of Financial Responsibility”, that form means that you are signing that you have insurance.
“I don’t own a car” or “I’m not taking a car with me to college” so “I don’t need insurance”. Well let’s back up a step. Most states, Ohio included, look at car insurance this way. The owner of the vehicle is considered primary insurance and the driver is the secondary insured. Meaning the owner of the vehicle their insurance would pay approved claims up to the policy limits, then if the driver’s insurance had higher limits their insurance would pay the excess up to those policy limits. However for all of this to apply there are a few conditions that need to be met. First – the owner of the vehicle auto insurance must have the endorsement ‘permissive use’. Many of the TV companies do not include this by default and offer it as an optional endorsement. Our carriers do offer it as standard in our policies – better piece of mind. The next step is to make sure the driver has insurance. Wait – what? If the vehicle owner has insurance why does the driver need insurance? Well – that is how the law is written. Back up to when you signed those forms as mentioned above to get your drivers license, you have to provide proof of financial responsibility. A clause in the permissive use endorsement is that it covers licensed and insured drivers. Oh…. there it is…. so the only way for permissive use to cover a claim is a license AND insured driver is behind the wheel.
“OK OK OK… so how does this affect me?”… simple… do you ever let anyone drive your car? Do you have a license but don’t own a car – yet drive your friends or families cars? Are you or your child going away to college? If you do not own a car but drive your friends car – example you are out with your college friends and they ask you to drive – if you do not have insurance and get in an accident or even just pulled over for a traffic violation – you have to provide proof that you as a driver have your own insurance.
It is a very simple fix. Get Insurance. You can be listed on your parent’s policy, a roommates policy, or a family member’s policy. Just get listed as a licensed driver on a policy. This typically will be beneficial for younger drivers getting discounts from the parents having a long term policy, age, and more. However if you want to have your own policy there is still an option. The solution is a “Non-Owners Policy” – this policy is specifically for those that have a license and do not own a car. This will appease the BMV and state law requirements along with validate the Permissive Use endorsement on auto insurance policies. The Non Owners policy is strictly a liability (bodily injury) policy – since you do not own a car there is no collision or comprehensive coverage available.
For additional information, contact us at 330-818-7599, or on Facebook at http://www.facebook.com/FarmersHyre