December 18, 2019

Non Owner Car Insurance


Even if you don't own a vehicle, you may need auto insurance coverage. Non-owner insurance can protect you in the event of an accident. Read on to see if you need it.

What is non-owner auto insurance?

Non-owner auto insurance provides liability coverage for bodily injury and property damage when driving a vehicle you do not own. These policies are typically inexpensive—up to 15% cheaper than a standard auto policy on average.

This coverage is often purchased by people who drive, but who do not personally own a vehicle. It takes effect if you're in an accident and found to be at fault, just as a normal liability policy would.

However, it doesn't cover damage to the car you borrowed or rented, and it doesn't pay for your own injuries if you cause the crash (more on this below).

Liability insurance covers injuries or property damage that you are legally liable for as a result of an accident you cause.

How Does Non-Owner Insurance Work?

Non-owner car insurance is purchased on a per-person basis. That means only you will be covered by the policy.

Typically, these policies don't have a deductible. This is because non-owner insurance is secondary coverage. It is only used if the owner of the vehicle's primary coverage isn't sufficient to cover all damages from the accident.

In order to qualify for non-owner insurance, you typically:

  • Must have a valid driver's license
  • Don't own a vehicle
  • Don't have regular access to a vehicle

Non-owner auto insurance isn't the right policy for everyone. Read on to learn more.

What Is the Cheapest Non-Owner Car Insurance?
To find the best price on non-owner's insurance, you'll need to compare prices from multiple companies. Start by calling an independent insurance agent in your area—many auto insurers don't advertise or sell these policies online.

What Does It Cover?

When the policyholder is found at-fault, a non-owner auto policy can include:

  • Bodily injury coverage

  • Property damage coverage

  • Medical payments or personal injury protection coverage (which pays if you are injured or you injure someone else in the accident)

  • Uninsured or underinsured motorist liability insurance (which pays if you're injured in an accident caused by a driver without any or enough liability insurance)

  • Rental car liability coverage

Can I Rent a Car with Non-Owner Insurance?
Most non-owner insurance policies extend their liability coverage to rentals. Check with your insurer or review your policy to be sure.

Rental car agencies also require collision coverage. Before buying the rental car agency's coverage, check your credit card benefits. Many credit card companies include free collision and loss damage coverages when you use their card to book your rental.

Non-owner does not cover comprehensive or collision coverage because there's no specific vehicle on the policy. That means it won't pay for:

  • Damages to the car you're driving

  • Medical bills or other costs from your injuries in the event of a collision

  • Towing reimbursement

  • Rental reimbursement

Be sure to ask your insurance agent or company what type of coverage is included. Some don't offer all of the above listed coverages. If you want something specific, let your insurance agent know.

If you purchase a vehicle, you must convert your non-owner auto policy into a traditional policy. Non-owner auto insurance will not cover a vehicle you own, so if you don't convert the policy, you will not be covered.

How much does non-owner insurance cost?

The average yearly cost of non-owner car insurance is $475. But the price cost varies extensively depending on where you live.

For example, the average cost of a non-owner car insurance policy in Wisconsin is $170. In New Jersey, it's $1,090.

Non-owner car insurance costs about the same as minimum liability coverage in a standard auto insurance policy.

A number of factors also affect the cost, including:

  • Coverage limits
  • Driving history
  • Age
  • How much you expect to drive
  • An SR-22 or FR-44 due to a DUI or traffic infraction

Non-owner car insurance costs about the same as minimum liability coverage in a standard auto insurance policy.

Best Non-Owner Car Insurance Companies

The cheapest price isn't always a good deal. When doing a price comparison, look at these factors:

  • The amount of coverage you're getting for the price
  • The customer service rating for the insurer
  • The financial stability of the auto insurer

Based on these factors, here is our Top 3 list of non-owner car insurance companies:

  1. GEICO
    Average Cost: $620
    Financial Stability Rating: A++
    Customer Satisfaction Rating: 4 out of 5
    Claims Satisfaction Rating: 3 out of 5

  2. State Farm
    Average Cost: $900
    Financial Stability Rating: A++
    Customer Satisfaction Rating: 3 out of 5
    Claims Satisfaction Rating: 3 out of 5

  3. Progressive
    Average Cost: $975
    Financial Stability Rating: A++
    Customer Satisfaction Rating: 3 out of 5
    Claims Satisfaction Rating: 3 out of 5

If you live in 2 different states for part of the year, like winters in Florida and summers in Massachusetts, buy a policy that will cover you in both states.

Who needs non-owner auto insurance?

You are not legally required to have auto insurance if you don't own a car. But you may want non-owner coverage IF:

You regularly rent vehicles
A non-owner policy may be cheaper than purchasing rental car insurance each time you rent. Rental car insurance coverage can cost $10–$20 per day, depending on the type of vehicle and type of coverage. Those costs will add up quickly and can be more expensive than the cost of a non-owner auto insurance policy.

Before purchasing, you want to confirm that the insurance company will provide liability coverage if you do rent a vehicle (not all insurance companies offer this). You'll also want to ensure damages to the rental car would be covered by your insurance or credit card's rental car insurance in the event of the accident.

You regularly borrow other's vehicles
You shouldn't drive without some sort of auto insurance protection. With non-owners auto insurance, you wouldn't have to worry whether the vehicle's owner has coverage that would also cover you, especially if their liability coverage is low.

However, if the vehicle you borrow belongs to a best friend or spouse, you may just want to be added to their auto insurance policy. This can help you save money in the long run as having multiple safe drivers on one policy can provide a discount with many insurers.

Also, in some cases, if the vehicle you crash is your spouse's or someone you live with, their insurance company may not cover the damages.

You sold your car or won't drive for an extended period of time
If you have a lapse in coverage, meaning you don't have insurance for a period of time, your rates may increase dramatically when you start a new policy.

Since non-owner insurance is typically less expensive, you may want to consider getting a policy.

Even if you don't think you'll need car insurance for some time, DON'T go without coverage. This includes times when:

  • You sell your car and don't immediately get a new one.

  • You own an expensive vehicle that you only drive on rare occasions.

  • You need an SR-22 or FR-44 due to a serious traffic infraction or DUI.

If you got a DUI or a serious traffic violation, you may need to file an SR-22 or FR-44 to get your license reinstated. Depending on the SR-22 requirements, you may need higher limits than the state minimum and must maintain this coverage for a certain period of time in order to maintain your license.

Using non-owner insurance to file an SR-22 may also be cheaper. While you will still pay higher rates due to the violation, it may be less than if you had a traditional auto insurance policy.

  • You are in the military and are deployed somewhere in the U.S. or overseas.

  • You use a car-sharing service.

If you use a car-sharing service like Maven, Car2Go, or Zipcar, you'll typically get some liability and damage coverage as part of your membership. But it may not be enough. Getting additional coverage through non-owner insurance can help.

Who doesn't need a non-owner policy?

Here are some scenarios where you won't need non-owners insurance:

You own a vehicle
Your traditional auto insurance policy (required by state law) will provide liability coverage. It also generally covers you if you borrow or rent another person's vehicle.

You borrow the car of someone you live with or whose auto policy you are already on
If you borrow the car of a parent, spouse, or other person you live with, you should get your name added to their auto insurance policy.

Even if you only occasionally drive the vehicle, their insurance company should be made aware of your living situation. Sometimes they may require the policyholder to name you as a driver. Otherwise, the insurance company may not cover certain (or any) costs should there be an accident.

You rarely borrow someone's car or rent a car
If you're driving a friend's car with their permission on occasion, their coverage will be considered the primary coverage if you're in an accident.

Keep in mind if you're in an accident and a claim is made, your friend's insurance rates may rise even though they weren't at fault. Also, if damages exceed their insurance coverage, any other costs will be your responsibility to pay out-of-pocket.

Not every insurance company covers someone other than the owner of the vehicle. Check that you are covered before borrowing someone's car.

You use a company car for business reasons
Typically, the company or its insurance will cover you in any accidents. However, if you use a company car for personal activities, you'll likely be held liable for damages caused by an accident.

Bottom Line

Non-owner auto insurance is a great option if you regularly rent or drive someone else's car. But you may not need it if you borrow your spouse's vehicle or rarely drive.

Overall, the coverage is cheaper than a traditional auto policy. It might be the best way to ensure you have the protection you need.

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