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What is Non-Owner Car Insurance and How to Tell if You Need it?



The number of vehicles on U.S. roads is rapidly increasing. Data shows that over 287 million personal and commercial vehicles were registered to U.S. drivers in 2021. However, not all drivers own the cars they shuttle around.


These drivers need non-owner car insurance besides standard auto insurance. It is the best policy for drivers who drive cars they don’t own, including individuals who use a car-sharing service or rent a car often.


However, non-owner car insurance may be unnecessary for some individuals, such as those living with a car owner or those listed in the car’s primary policy.


Here’s what you need to know about non-owner car insurance and whether you need it.


What is Non-Owner Car Insurance?

Non-owner car insurance covers your liability for property damage or bodily injury when driving a car that’s not yours. Therefore, if you get into an accident, your non-owner insurance policy will protect you from lawsuits, similar to a standard auto insurance policy.


A non-owner insurance policy will also cover the following:

  • Uninsured and underinsured motorist coverage

  • Medical payments or personal injury protection coverage

  • Rental car liability coverage

Also known as nondrivers insurance, non-owner car insurance doesn’t have a car attached to the policy. Therefore, it lacks collision or comprehensive coverage, which pays for damages to your car in an accident.


How Does It Work?

Non-owner auto insurance is secondary to the auto insurance a car owner has on the vehicle. However, it is an individual policy, meaning you’re the only one covered. It excludes your spouse, passengers, or any other driver.


The car owner’s insurance will typically pay first if you get involved in an accident. That’s because auto insurance always follows the vehicle. The non-owner insurance policy will get invoked only if the primary policy can’t cover all the damages.


Non-owner auto insurance policies don’t have deductibles. Therefore, if you file a claim, you don’t have to pay any money out of pocket before coverage kicks in.


What Might Necessitate a Non-Owner Car Insurance Policy?

Besides not owning the vehicle you’re driving, you might want to get a non-owner car insurance policy because of the following reasons:


You Need to File an FR-44 or SR-22 Form

Your state may require you to present an SR-22 or FR-44 form to get your driver’s license reinstated after a serious motoring violation. Insurers file these forms on your behalf, proving you have the minimum insurance coverage the state needs.


State Law Requires You to Provide Insurance to Get Your Driver’s License

In some states, you must get auto insurance to show proof of financial responsibility before being given your driver’s license.


You Rent Cars or Use Car-Sharing Services Frequently

If you rent cars or use car-sharing services frequently, non-owner car insurance coverage offers extra coverage above what the rental or car-sharing company’s insurance will provide.


For rental car companies, extra coverage is often more expensive at the counter than purchasing non-owner car insurance.


You Want to Maintain Continuous Coverage ­­

Going without auto insurance for some time, even when switching between cars, appears risky to most insurers, who’ll hike their premiums in response. Therefore, buying non-owner car insurance to avoid such a lapse in coverage is cheaper than skipping it altogether.


What Is Covered by Non-Owner Car Insurance?

Non-owner car insurance policies will vary based on the provider. However, most policies typically include liability coverage for property damage and bodily injury.


Liability coverage for property damage covers the cost of repair and replacements for damage on someone’s property caused by an accident where you’re at fault. This includes their vehicle, home, fence, and other physical structures.


Liability coverage for bodily injury covers the cost of medical care if the other driver or passenger is injured in an accident where you’re at fault.


Depending on your state, non-owner auto insurance may also include medical payments coverage (MedPay), uninsured/underinsured motorist coverage (UM/UMI), or personal injury protection (PIP).


The limits of most non-owner car insurance policies typically match the minimum limits set by the state for auto insurance.


What Isn’t Covered by Non-Owner Car Insurance?

Non-owner car insurance typically covers a driver’s basic liability insurance needs since there’s no car attached to the policy. Therefore, there are several exclusions to the cover, such as:

  • Car damages – Non-owner car insurance excludes collision and comprehensive insurance since there’s no car to protect.

  • Roadside emergencies – Roadside assistance, which includes tire changes or jumpstarts, is often not a coverage option in non-owner car insurance.

  • Accident injuries – If your non-owner auto insurance policy only has liability insurance, you won’t get coverage for injuries you suffered in an accident. You must include medical payments coverage to get this coverage.

  • Interrupted trip – Non-owner car insurance doesn’t cover expenses incurred from a stranded road trip, including food, hotel stay, and roadside assistance.

  • Other drivers – Non-owner car insurance policies don’t cover spouses or other drivers within a household.

  • Rental car after an accident – Non-owner car insurance doesn’t offer money for a taxi, rental car, or any other transportation if the car gets wrecked in an accident.

  • Personal belongings – A non-owner car insurance policy won’t cover lost, stolen, or damaged personal belongings in your car.

When is Non-Owner Car Insurance Unnecessary

You typically don’t need a non-owner car insurance policy if:

  • You live with someone who owns a car – Your spouse, parent, or whoever you live with can add you as a driver to their primary auto insurance policy. However, you must tell the company of the addition.

  • You rarely borrow anyone’s car – Depending on the insurance company providing the primary auto insurance coverage, you may not need non-owner car insurance if you’re driving a borrowed car with permission on few occasions.

  • You drive a company car – Employers and their insurance policy typically pay damages on company cars.

How Much is Non-Owner Car Insurance?

Non-owner car insurance will typically cost around $70 monthly. This is about 5 to 15% less than the minimum coverage for an auto insurance policy. The actual costs vary based on the following:

  • Your driving history

  • Your coverage limits

  • How often you expect to drive

  • Where you live

Any DUIs or incidents on record will increase your rates.


Consult a Professional About Your Policy

A non-owner car insurance policy is the best cover for someone renting vehicles and using car-sharing services often. Your best policy will depend on how often you drive, where you drive, and your driving history.


Consult a professional and let them help you choose the best policy that fits your needs.

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