If “non-owner” car insurance sounds strange, that’s because it is: Car insurance for folks who don’t own a car. But there are a few good reasons to buy non-owner car insurance.
For example, if you’re someone who often rents or borrows cars, non-owner car insurance provides liability coverage that will protect your assets (like your house and savings) in case you’re sued because of a car accident.
Non-owners car insurance can get you out of other types of jams. If you’re in-between cars and don’t need a traditional car insurance policy, non-owners car insurance will help you avoid a “coverage gap” and save you money in the long run. Non-owners insurance will also satisfy a state’s SR-22 (or SR-44) requirements, you are required to file that form.
What Does Non-Owner Car Insurance Cover?
If you cause a car accident while driving a rented car, non-owner car insurance covers:
- Bodily injury you cause to others, such as medical expenses
- Damage you cause to others, such as car repair bills or property damage
- A legal defense in case you are sued for causing a car accident
Depending on your state and insurance company, you may be able to get medical coverage with non-owner car insurance policy, such as:
- Uninsured motorist coverage (UM): This coverage pays for your medical expenses if someone crashes into you and they don’t have liability insurance or not enough. Uninsured motorist coverage can also cover hit-and-run accidents, depending on your state.
- Medical payments (MedPay): This coverage pays for you and your passengers’ medical bills no matter who caused the accident.
Non-owner car insurance is a secondary coverage, meaning it kicks in after any primary coverage pays. For example, if you borrow a friend’s car and cause an accident, your friend’s car insurance pays first, up to the policy limits. If the policy’s liability limits are exhausted, your non-owner car insurance can then pay (up to your policy limits).
What’s Not Covered by Non-Owner Car Insurance?
While non-owner car insurance is designed to cover a driver’s basic liability insurance needs, there are several common exclusions:
- Damage to the car you’re driving. Non-owner car insurance doesn’t include collision and comprehensive insurance, which covers a wide range of problems like car theft, fires, floods, hail, riots, vandalism, collisions with animals and falling objects. If someone else causes an accident to a car you’re driving, the vehicle’s owner can file a claim under their own collision and comprehensive insurance, or against the at-fault driver’s liability insurance.
- Injuries you suffer in a car accident. If your non-owner car insurance policy only has liability insurance, you won’t be covered for any injuries you suffer in a car accident. If you want coverage for injuries, you may be able to add medical payments coverage.
- Other drivers. Generally, non-owner car insurance policies only cover you, not your spouse or any other drivers in your household. Some insurance companies won’t allow you to have a non-owner car insurance policy if someone in your household has a personal auto insurance policy.
- Business driving. If you’re driving a car for work purposes, like delivering goods to a client, you most likely won’t be covered by a non-owner car insurance policy. Business use is a common exclusion for non-owner car insurance policies.
- Personal belongings. A non-owner car insurance policy won’t cover your personal belongings that are lost, damaged or stolen. For example, if someone steals your laptop from a car you’re borrowing, it’s not covered under auto insurance. You may have coverage for personal belongings through your homeowners insurance or renters insurance.
When to Consider Non-Owner Car Insurance
There are a few reasons why it can be worth getting non-owner car insurance:
- You rent cars often. If you rent cars on a frequent basis, you might want non-owner car insurance so you don’t have to buy liability insurance from a rental car agency.
- You use a car-sharing service often. If you rely on a car-sharing service like Zipcar or Getaround, non-owner car insurance can provide more coverage than the company provides. For example, Zipcar provides only the minimum liability car insurance requirements.
- You don’t want a coverage gap in your car insurance. Not having car insurance creates a “coverage gap,” which car insurance companies see as a higher risk, and usually translates into higher car insurance premiums the next time you buy car insurance. Non-owner car insurance is a good way to avoid a coverage gap if you’re in between vehicles.
- State law requires you to file an SR-22 (or FR-44) form. Your state might require you to show proof of car insurance if you’ve had problems like DUI convictions, license suspension or revocation, you were caught driving without insurance, or other types of problems. Non-owners SR-22 insurance is a way to get auto insurance without owning a car.
Reasons You Don’t Need Non-Owner Car Insurance
Here are some reasons you wouldn’t need non-owner auto insurance:
- You own a car. If you already own a car, you’ll need a regular car insurance policy.
- You drive a car owned by someone in your household. If someone in your household has a car, like your spouse or parent, you should be listed on their car insurance policy.
- You borrow a friend’s car. If you get into an accident while driving a friend’s car, their car insurance company would pay. However, if you cause an accident and their liability insurance is insufficient, you could be responsible for any damages (like medical bills or property damage) not covered by your friend’s insurance. If you borrow cars often, it might be worth considering non-owner car insurance.
How to Get a Cheap Non-Owner Policy
The cost of a non-owner car insurance policy will depend on several factors, including your state and car insurance company. Here are some other common pricing factors:
- Your driving history. Generally, drivers who avoid car accidents and traffic violations pay less for car insurance.
- Your age. Younger drivers with less driving experience can typically expect to pay more than older drivers with more driving experience.
- The amount of coverage you want. The higher your policy limits, the more you can expect to pay. We recommend buying more than your state’s minimum liability requirements. If you cause a car accident and you don’t have enough liability insurance, you could be on the hook for the rest, such as medical bills and property damage. It’s smart to have a liability insurance amount that covers the assets you would risk in a big lawsuit, such as your house and savings.
Who Offers Non-Owners Car Insurance?
Most car insurance companies don’t advertise whether they sell non-owner car insurance and some car insurance companies might only offer non-owner car insurance to existing customers. For example, we reviewed a Progressive Insurance policy that says a non-owner car insurance policy is not available at the time of a new policy purchase but is available to existing customers who choose to endorse all vehicles off of the policy. For example, if you have a policy with Progressive but get rid of your car, you may be able to choose the non-owners endorsement to maintain your car insurance.
Here are some insurers that sell non-owner car insurance. Keep in mind, these companies might not sell non-owner car insurance in every state and you may need to be an existing customer to be eligible to purchase it.
- State Farm
- Liberty Mutual
- Farmers Insurance
If you’re not sure where to turn, an independent auto insurance agent can help you find a policy.
Non-Owned Car Insurance for Businesses
If you own a business and have employees who sometimes use their personal cars for work reasons, such as making a delivery, you may need non-owned car insurance. It will extend the liability coverage from your commercial auto policy to employees’ personal cars. It’s intended for cases where employees use their personal vehicles only occasionally for work.
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