Build an insurance history with an inexpensive non owner auto policy before you buy your first car and you may see a 15-30% discount on your car insurance when you do get your car.
What is an insurance history and why does it matter?
One surprising factor car insurance companies use to decide what to charge you is whether you have been continuously insured in the past. Insurance companies usually offer discounts of 15-30% to new customers who have previously had car insurance. Typically, you'll need to have had insurance for at least 6 months, and sometimes discounts are larger for customers who have been insured for longer.
Why do insurance companies look at your insurance history? It's because they see people who have had prior insurance as better risks - more likely to pay their bills, and less likely to get in accidents.
How do I build an insurance history if I don't have a car?
If you don't own a car, consider getting non owner car insurance to start building your insurance history. These policies typically cost about 1/3 of what regular auto insurance costs and they count towards being continuously insured.
Non owned auto policies cover your liability if you're responsible for an accident that injures someone else or damages their vehicle. These policies don't cover the car you're driving, though. The car needs to be covered on the owners policy, or if it's a rental car, by insurance provided through a premium credit card or that you buy from the rental company.
Read our guide to non owner auto insurance here.
When should I start building my insurance history if I'm planning on buying a car?
Usually, you'll want to make sure you've got insurance in place at least six months before you buy a car. 6 months is the cutoff many insurance carriers use for offering a continuous insurance discount. And, hey, in the meantime, you've got liability coverage when you drive!
What should I do if I have a lapse in my insurance?
Just get your insurance back in place as soon as you can. Many insurance companies do still offer continuous insurance discounts for new customers who have had a lapse in their insurance, typically so long as that lapse was less than 30 days long. Still, the discount might be smaller than what's available to a customer with no lapse, so try to keep that insurance in place!
What happens when I buy a car and need car insurance? Do I need to prove I've been insured?
Congrats on your new car! You will usually be asked about prior insurance when you get a quote for owned auto insurance. You may need to send your insurance company a copy of the declarations page from your non owner policy so keep it handy, but that should be it.
Surround makes insurance easy. Check out our detailed non owner auto insurance guide.