Believe it or not, it’s important to carry car insurance even if you don’t own a car. There are a couple of scenarios we will delve into, in which you may be a driver of a vehicle you do not own. Even when you do not own the vehicle, carrying coverage may protect you against financial hardship in the event of an accident.
What is non-owner car insurance?
Non-owner car insurance offers insurance coverage to people who do not own a vehicle, do not have regular access to a car and have a valid driver’s license. To put it simply, non-owner car insurance is liability insurance for people who occasionally drive, but don’t have a car registered under their name.
Non-owner insurance covers others’ injuries and any damage to their property while you’re driving a vehicle that you don’t own. This coverage can be purchased for a number of reasons, ranging from frequent car rentals to borrowing a car.
Before we go any further and begin examining the best non-owner car insurance, there are a couple of unique things to note about this type of insurance. The first is that non-owner insurance isn’t appropriate for drivers who live with the owner of the car that they’re driving.
Second, this type of insurance doesn’t cover the damage done to the vehicle that you’re driving. For that reason, it’s almost always less expensive than a typical car insurance policy, but you are responsible for the repair costs if you’re involved in an accident while driving a car you don’t own.
When do you need non-owners car insurance?
Although the idea of having car insurance when you don’t own a car may not seem necessary, there are circumstances where it’s a good idea.
You frequently borrow or rent cars
If you sometimes drive someone else’s car, non-owner car insurance might come in handy. If you’re in an at-fault accident using your friend’s car, and you exceed the limit of their insurance policy, non-owner insurance would help you pay for any damages you still owe. However, if you live with the person whose car you often use, you will have to be added to their policy.
If you live with the person whose car you often use, some insurers will require you to be added to that person’s policy instead of getting non-owners car insurance separately.
The National Association of Insurance Consumers (NAIC) recommends people using ridesharing programs, who do not already have their own car insurance coverage, consider a non-owners insurance policy.
Your license has been suspended and you need an SR-22
If you are seeking reinstatement of your driver’s license after suspension, an SR-22 may be required. An SR-22 is a form or proof of coverage certifying that you have your state’s minimum liability coverage. It is important to note that even though you may hear it referred to as “SR-22 insurance,” the SR-22 is not an insurance policy. You must have an insurance policy to obtain an SR-22. The SR-22 is just what you need to prove you have gotten the minimum coverage required in your state to get your license reinstated.
You’re between vehicles and want to avoid a lapse in coverage
Having lapses in your insurance is a red-flag that inspires rate hikes among insurers. To keep rates lower over the long term, sometimes it makes sense to get a non-owners policy to avoid a lapse in coverage while you’re shopping for a vehicle.
How to get non-owner car insurance
Most insurance companies don’t advertise that they have non-owners insurance. Furthermore, some won’t issue non-owner car insurance over the phone or online, you have to get it in person with a broker or an agent.
Some companies don’t offer non-owner insurance at all. However, the companies listed below do offer non-owner insurance over the phone.
Cost of non-owner insurance
The cost of non-owner car insurance varies based on a number of different factors. Some, but not all, are marital status, credit score, age, location and driving record.
With standard auto insurance, those factors plus the value of the car insured are considered. With non-owner car insurance, there is no specific vehicle insured, so the insurance company sets your rate by their estimate of how likely you are to cause an accident and use those factors to help determine the risk level.
Generally, non-owner auto insurance costs about the same as a liability policy, or around $200-$500 per year.
Frequently asked questions
Do I need non-owner insurance if I am borrowing a car from a family member?
You might want to add non-owner coverage. It will protect you in case of an accident by adding liability coverage, personal injury protection and uninsured motorist coverage.
It is important to remember though, that if you are in an accident in your family member’s car, a resulting insurance claim may cause their rates to increase. You would also need to be prepared to cover any excess costs not covered by their insurance policy.
If you live with the family member, you should be added to their policy as a driver.
Can I rent a car with non-owners insurance?
Definitely. Having non-owners insurance will save you from buying the rental car company’s pricey insurance and may save you money if you rent cars frequently.
My company issues me a company car. Does that mean I should get non-owners insurance?
No. Company cars are usually exempt from non-owner insurance. Though it never hurts to ask to be sure, usually, a company vehicle policy covers the car when it’s used for business. If you use the company car all the time, you should add a drive other car endorsement to further protect you in case of accidents.
While driving a friend’s car, I got into an accident and totaled it. Does non-owners insurance cover the damage to his car?
No, but their car insurance should (assuming they have collision and comprehensive). Non-owner insurance doesn’t provide collision or comprehensive coverage. However, it will help if your friend’s policy is maxed out and the other car is damaged and/or the other party was injured.
What are some things non-owner insurance does not cover?
Since non-owner insurance only covers liability, there are many things it does not cover. It does not cover comprehensive, collision, towing reimbursement or other roadside assistance benefits commonly offered on standard auto insurance policies.