Do You Need Non-Owner Car Insurance?
Imagine that you have borrowed a friend’s car to run a few errands. You stop at an intersection and look around before turning left. Since there’s no one in sight, you decide to proceed. You move your foot to the gas pedal and…Bang!
It might have been the setting sun that prevented you from spotting the vehicle coming from your right. In any case, there you are, and the two cars have collided.
Once you and the other driver have exchanged contact details, you learn that your friend has liability insurance. But it’s not enough to cover the damage to the other driver’s car.
Your friend does not have comprehensive or collision insurance—meaning you will have to pay for the repairs out of your pocket. You will also have to cover the expenses for the damage on the other car, over and above your friend’s liability coverage.
In hindsight, you wish you had taken out a non-owner car insurance policy.
What Is Non-owner Car Insurance, Exactly?
A non-owner car insurance policy is a type of auto insurance that provides liability coverage for people who do not have a car, but frequently drive cars they do not own.
This policy does not insure cars. Rather, it covers you—the driver—by providing you with basic liability insurance if you cause an accident and inflict bodily injury on someone else or damage other people’s property.
While non-owner car insurance covers you in the case of a lawsuit, it does not cover damages to the vehicle you drive or the injuries you or your passengers suffered during a collision.
A non-owner car insurance policy typically includes only the required minimum of property and bodily injury liability coverage. But what if you want to get coverage in case you or your passengers get hurt? There is a solution for that, too.
Just ask your insurance company to add uninsured/underinsured motorist protection or medical payment/personal injury protection to your basic non-owner car insurance policy.
- Uninsured or underinsured motorist protection: This covers your medical bills if you and your passengers get injured in an accident caused by an uninsured or underinsured driver. Coverage details depend on your policy, but usually include injuries suffered by you and the people in the vehicle you are driving.
- Medical payments or personal injury protection: This covers the cost of treating the injuries you and your passengers may suffer in an accident, regardless of who is at fault. Personal injury protection may also reimburse you for lost wages while you recover from a collision.
In some states, uninsured/underinsured motorist protection and medical payment/personal injury protection are mandatory parts of the non-owner insurance policy. Elsewhere, you may be able to purchase them from your insurance company as additional coverage.
Key Point: Can I Add Additional Insurance for Borrowed or Rented Cars to Non-owner Car Insurance?
In case you wonder whether you can also add some extra levels of insurance for a borrowed or rented vehicle to your non-owner policy, the answer is: no, you can’t.
Only car owners can get their vehicles covered by collision and comprehensive insurance.
You cannot buy collision or comprehensive insurance for a vehicle somebody else owns, because the insurer would not know the value of the vehicle you will be driving.
That’s why it’s a good idea to check what kind of coverage a car has before you borrow or rent it. If it is not fully insured, you may need to pay out of pocket for the damage caused by an at-fault accident or any other event—for example, hail.
What exactly does non-owner car insurance cover?
Suppose you cause an accident while driving a rented or borrowed vehicle. In that case, your non-owner car insurance will cover the following (up to coverage limits):
- Injuries to other people, but not injuries inflicted on you or the passengers in your car.
- Damage to other people’s cars or property, but not the damage to the vehicle you are driving.
- Legal costs in case you are sued for causing an accident.
Additionally, your non-owner insurance policy may cover:
- Injuries sustained in accidents caused by an uninsured/underinsured driver if you have the uninsured or underinsured motorist protection add-on.
- If you opted for the medical payments or personal injury add-on, your and your passenger’s medical costs will be covered regardless of who caused the accident.
What isn’t covered by non-owner car insurance?
Strictly speaking, a non-owner policy does not insure a car—it gives you financial protection in case you cause an accident while driving a borrowed or rented car.
Non-owner policies may come with specific exclusions. Some policies may exclude coverage for certain types of vehicles, such as motorcycles or commercial vehicles.
It is important to read the policy details carefully and understand the exclusions and limitations before purchasing non-owner car insurance.
A non-owner liability policy typically does not cover the following:
- Damage to the vehicle you are driving: This might be covered by the owner’s car insurance or by that of the other car’s owner. Remember, non-owner car insurance does not include collision and comprehensive insurance, which covers various events—from hail and vandalism to falling objects and collisions with animals. If someone else causes an accident, the owner of the automobile you were driving can file a claim against the at-fault driver’s liability insurance in at-fault states, or under their collision and comprehensive insurance.
- Injuries you or your passengers suffered in a car accident unless you have additional medical bills coverage.
- Anyone else driving, except you: The policy is in your name and does not cover your spouse or any other family member when they drive the borrowed car.
- Trips undertaken for business purposes are typically excluded from non-owner car insurance policies.
- Personal belongings that get lost, damaged, or stolen while you use a borrowed car. No auto insurance covers personal belongings. For that, you need to take out a separate homeowners insurance or renters insurance policy.
Who needs non-owner car insurance?
As we’ve mentioned above, you can buy non-owners insurance if you don’t own a vehicle, but plan to drive someone else’s car. You will need this type of auto insurance if:
- You frequently rent cars, use car-sharing services, or regularly borrow cars: A non-owners policy will typically give you better liability coverage and could be cheaper than rental car or car-sharing insurance. As for regularly borrowing family or friends’ cars, your non-owner policy may kick in if their insurance is not sufficient. On top of that, non-owners insurance will cover you should anyone decide to sue you for damages or bodily injury.
Key Point: What Are Car-Sharing Services?
Car-sharing is similar to car rental but structured for drivers who want to rent cars for short periods, for example for a few hours. The drivers only pay for the duration of the usage and the distance traveled.
Car-sharing also allows you to get a car at any time of the day, not just during business hours. So, it provides on-demand, short-term car rentals. Depending on your usage, you may save money with car-sharing.
Car-sharing services may involve a company providing the vehicles, or a peer-to-peer sharing system where anyone can list their car for rental. The leasing company sometimes provides insurance, but not always. In the latter case, it’s a good idea to purchase a non-owner policy.
- You want to maintain continuous coverage: If you find yourself temporarily between cars but want to avoid a coverage gap, it is a good idea to get a non-owner insurance policy. Insurance companies regard a gap as a higher risk. That may lead to an increase in premiums when you then do get a car and want to insure it.
- You need an SR-22 or FR-44 form: In some states, drivers with previous traffic convictions may have to obtain an SR-22 or FR-44 document as proof of sufficient car insurance. The non-owner policy allows you to obtain these forms even if you do not own a car.
Key Point: What Are SR-22 and FR-44 Forms?
SR-22 and FR-44 forms are proof of vehicle insurance. In some states, the court or the Department of Motor Vehicles (DMV) may order drivers who committed specific offenses to carry liability insurance documents.
These offenses may include a DWI or DUI conviction, driving without a license, too many speeding tickets, and so on.
The document that proves the driver has minimum liability insurance is called SR-22. The FR-44 form is similar to an SR-22, but applies only to Florida and Virginia.
If you own a car, you can get an SR-22 or FR-44 certificate from your insurer. However, if you do not own a car but want to drive someone else’s vehicle and need an SR-22 or FR-44, you first need to take out a non-owner car insurance policy.
Remember, non-owner insurance only covers the damage or injury caused by the named driver—which is the person listed on the policy. Some insurance companies apply coverage to a spouse, but many do not.
It’s important to make sure you and your spouse have basic liability coverage if you both drive borrowed vehicles.
Who doesn’t need a non-owner car insurance policy?
As we’ve mentioned earlier in this article, a non-owner car insurance policy is typically for individuals who do not own a car but frequently drive cars they do not own, such as a rental car or someone else’s vehicle.
If you do not fall into this category, you may not require non-owner car insurance. However, it’s always good to check with your insurance company to make sure you have the appropriate coverage.
In general, you do not need a non-owner car insurance policy if:
- You frequently drive a car that belongs to someone in your household: In this case, you need to be listed in the car owner’s policy as an additional driver.
- You drive a company car: In these instances, many companies purchase commercial car insurance.
- You rarely rent cars: If you rent a car once or twice a year for a vacation, a more affordable option is to take out the rental company’s insurance. As we’ve said, purchasing a non-owner policy is a financially sound option only if you frequently rent or borrow cars.
- You don’t drive at all and regularly make use of public transportation.
How Does Non-owner Car Insurance Work?
It’s important to note that non-owner car insurance is bought on a per-person basis. In other words, you buy it in your name and it would not cover anybody else—including your spouse or family members.
Non-owner auto insurance works like the liability coverage that someone who owns a car would have.
If there is an accident and you are at fault, your non-owner insurance would cover the other driver’s injuries and damages to other cars and property.
It will also cover you and your passenger’s medical expenses, but only if you have additional coverage—such as uninsured/underinsured motorist protection and/or medical payment/personal injury protection.
The expenses are covered up to your liability limits. Your liability limits are the maximum amount that your insurance will pay out. You can check how much coverage you have on your policy’s declarations page.
As a rule, non-owner policies do not have a deductible, so you will not have to pay any money before your insurance kicks in. If you purchase personal injury or uninsured motorist protection, you may have to pay a deductible for claiming against those types of coverage.
Non-owner car insurance is secondary coverage. It will only come into play if the car owner’s insurance, which is considered primary, cannot cover the cost of damages you caused.
For example, let’s say you were in an at-fault accident while driving a friend’s car. The property damage came to $40,000. Your friend’s liability insurance property coverage limit is $30,000.
If you have a non-owners policy with a $40,000 limit for property damage liability coverage, the difference would be covered.
However, if your non-owner insurance does not have a higher liability limit than your friend’s, it will not even kick in and you will have to pay the difference out of pocket.
How Much Does Non-owner Car Insurance Cost?
A non-owner car insurance policy’s rate is usually between 5 and 15% cheaper than that of a standard policy, making it relatively inexpensive in comparison with what you would pay for liability insurance on a vehicle you own.
The cost of this type of policy can vary widely from insurance provider to insurance provider. It is recommended to get quotes from multiple insurance companies to compare rates.
By entering your zip code at the top of this page, you can access and browse through multiple quotes to find one that suits your needs and budget.
The cost for non-owner car insurance depends on several factors, such as:
- Your driving history: Drivers who have not been involved in accidents and do not have a record of traffic violations generally pay less for auto insurance.
- Your age: Young drivers can expect to pay more than older and more experienced drivers. Some insurance companies require the driver to be at least 21 to qualify for a non-owner car insurance policy.
- The coverage you choose: You will pay more if you opt for higher policy limits. Your premiums will also be higher if you decide to add uninsured/underinsured motorist protection and medical payments coverage or personal injury protection. It is advisable to take out more liability coverage than your state’s minimum requirements. If you cause an accident and you do not have enough coverage, you could end up having to pay a large amount out of pocket.
Non-owner car insurance eases the potential burden of financial responsibility when you drive another person’s vehicle.
This is because non-owner insurance provides coverage for bodily injury liability and property liability others may suffer as a consequence of an accident you cause. You may be able to buy add-ons that also cover your and your passengers’ medical expenses.
A non-owner auto insurance policy is a good way to get insurance without owing a car. The policy is in the name of the driver and will only provide liability insurance for the named driver.
This type of policy does not offer the comprehensive protection of a full-coverage policy, because it covers a specific policyholder and not a particular vehicle.
You may want to consider getting non-owner insurance if you frequently borrow someone else’s car, or use rental or car-sharing services. Most insurance companies offer non-owner coverage at lower rates than a standard auto policy.
Find the Best and Cheapest Non-owner Car Insurance with Cheapinsurance.com
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