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Is Nonowner Car Insurance Something You Need?

Fran
Fran Majidi November 3, 2020

For many people downsizing may mean selling a car, using a rental car, or perhaps sharing one with a partner or friend. The easiest and preferred way to get coverage in this type of situation is to be listed as a driver on the policy. However, you will not get extra liability coverage this way. Ideally, you'll be listed on the policy and you will buy non-owner car insurance in case something does happen and the liability limits on the primary policy are not sufficient. Therefore, non-owner insurance provides liability coverage for drivers who do not own a vehicle.

Can I Get Auto Insurance Without Owning a Vehicle?

Yes! This is known as 'non-owner policy car insurance,' and it provides liability coverage when you don't own a vehicle or drive someone else's. In the event of a car collision, liability coverage pays for the injuries and damages for which you are at fault. 

Where Can I Buy a Nonowner Car Insurance Policy?

Since certain insurance providers do not provide online services with this sort of policy, you can compare rates and get an insurance quote. You must hold a valid driver's license and not own a vehicle to purchase non-owner policy car insurance. Most insurance companies often require that you don't have daily access to a car, such as one driven by a family member. If someone in your household owns a vehicle, you can try to get listed as a driver on their auto insurance policy if possible.

What Is Non-Owner Car Insurance?

When you drive a vehicle that isn't yours, a non-owner policy will provide liability coverage, to pay for injuries and property damage if you're found to be at-fault in a collision. It does not, however, cover the damage to the cars you've borrowed or rented, nor does it cover your own injuries if you are involved in an at-fault collision. It also does not offer collision or comprehensive coverage, which means that you will only be paid out for damages you cause to another driver (and/or passengers), but not for your own property losses and injuries. Non-owner coverages also vary by state and company. This type of policy covers the minimum requirements of that state. You can also increase your limits.

When To Consider Non-Owner Car Insurance

You may want to consider buying a non-owner car insurance policy if you borrow or rent cars frequently, maybe even regularly, or if you are the owner of a vehicle and you want coverage for drivers who drive or rent cars but are not on your policy. 

You will be covered for any damages you may cause in rental cars with a non-owner policy. Non-owners auto insurance is usually considered "secondary coverage," meaning it is used if the car owner's insurance fails to cover the cost of repairs and medical payments in the event of an at-fault accident. 

Reasons you may need non-owner car insurance:

  • You need an SR-22 or FR-44 filing.

  • You need insurance to have your driver's license reinstated.

  • You use a car rental service. Most car rent sharing services provide only minimum insurance

  • You don't want your insurance to lapse but are in between vehicles. A lapse in coverage causes a hike in rates.

  • Insuring a vehicle you don't own (only possible in some states).

What's Non-Owner SR-22 Insurance?

An SR-22 is for high risk drivers. If you were convicted of a DUI or another serious violation, you may need to file an SR-22 or FR-44 for license reinstatement. Most states need evidence of financial obligation under a policy known as "proof of financial responsibility" and a valid license. You will be required to certify that you have auto insurance as part of proving you can maintain responsibility. 

Buying a vehicle can be costly and the auto insurance cost may be unaffordable, but you can buy a used car and get lower rates or still meet state requirements by purchasing non-owner insurance without actually owning a vehicle. 

Keep in mind that a non-owner policy needed for a SR-22 is typically more expensive compared to what you would pay for a traditional non-owner insurance policy.

How Much Does Non-Owner's Car Insurance Cost?

Non-owner policy car insurance is not expensive at all. In fact, it's cheaper than buying the minimum car insurance coverage on owned vehicles. However, your rate will still depend on the same variables used to determine your regular auto insurance rate. 

To get a quote begin by entering a zip code to compare rates or call 855-214-2291. Before you call, have the details they'll need, such as your driving history — any injuries, prior tickets, or driver's license suspensions — as well as the state and number of your driver's license. If you decide to proceed with the policy, you will be required to provide a credit or debit card number to pay for coverage. Deductibles are typically not required by insurers for non-owner car insurance plans.

A non-owner car insurance package costs on average $475 per year. The cost of non-owner car insurance varies by state and company, but it typically costs less than the typical premiums that covers a car.

Factors that influence the cost of a non-owner insurance:

  • Driving history
  • Geographical location
  • The amount of liability insurance coverage you want

High-risk auto insurance could be needed depending on the driving history. If this is the case, your non-owner insurance policy would certainly cost more than for someone with a clean driving file. This is especially true if you are a driver who needs to get their drivers license reinstated with Non-Owner SR-22 Insurance. Drivers may be considered "high-risk" by their insurer if their file includes:

  • A DUI conviction
  • Driving without insurance
  • Multiple traffic offenses
  • Reckless driving

What Does Non-Owner Car Insurance Policy Cover and Not Cover?

As mentioned above, your non-owner car insurance policy should cover minimum state requirements, like liability coverage for property damage and injuries you cause to others, except passengers or damage to the car. It may also help with medical payments or personal injury protection (PIP) in states where it's mandatory, which pay for your injuries after a wreck no matter who is at fault. Sometimes, a non-owner policy will also have uninsured/underinsured motorist coverage which pays out if you're injured in an accident caused by a driver without any or enough liability insurance. Make sure to give your auto insurance agent or company a call to help break it all down for you. 

Non-owner insurance does not cover:

  • Collision coverage
  • Comprehensive coverage
  • Rental car reimbursement coverage
  • Towing reimbursement coverage
  • Medical bills

Compare Rates and Get a Non-Owner Car Insurance Policy.

Which Insurance Company Offers Non-Owner Car Insurance?

It's not as easy to purchase a non-owner policy as it is to purchase a regular policy. Allstate, for instance, does not offer it. Most insurance companies offer it, but some will only sell to existing customers. Insurers don't tend to offer non-owner auto quotes online as this policy is not a product insurers are pushing. The best way to purchase a non-owner car insurance policy is to call or visit a trusted agent.

Some companies who do offer non-owner auto policy are:

Keep in mind that non-owner car insurance will not be available in all states.

What Is a Lapse in Coverage and Will This Help?

A lapse in coverage is the period during which you have no auto insurance policy. Even if you don't have a car during that period of time, most insurers look at lapses in coverage as a high indicator of risk. This causes a hike in your car insurance rate, even if you have a perfectly legitimate reason for not having coverage, like not owning a car. 

One way to prevent an increase in rates, while protecting you in case you are in an accident in a rented or borrowed car, is to purchase non-owner car insurance. If you won't drive for an extended period of time, you should consider buying this type of policy too.

Can a Non-Owner Policy Help Young Drivers?

One-way young people can lower their car insurance rates is also by having this type of insurance, which will be cheaper than car insurance on an actual car and can help coast through those initial years when car insurance rates are at their highest. 

In most cases, young drivers will be listed on their parents' car owner's policy as well, but this is yet another way to know you can borrow another person's car and still have coverage while building up a clean driving record so you can eventually pay the lowest rates available.

To get in touch with an agent, call: 855.214.2291.

Will I Be Covered Without Non-Owners Insurance if I'm in an Accident in Another Person's Car?

In most cases, if you have the permission of the car owner, you will be covered in the event of a collision with basic liability coverage, even without a non-owner insurance policy. Your chances of coverage are even greater if you're listed on the policy. What a non-owners insurance policy would do is kick in after the primary insurance policy is maxed out, in order to pay for the remaining losses to the other driver and passengers. 

If you are in an accident in someone else's car, the damage to the borrowed vehicle will be covered by the existing car owner's policy on the vehicle. But when that person's vehicle coverage isn't enough to cover all of the losses, the non-owner insurance policy will serve as a secondary coverage and come in and generally cover the remaining costs. 

How Will a Nonowner Car Insurance Policy Pay for an Accident?

The risk cap on a nonowner car insurance policy must be higher than the liability limit on the owner's car insurance policy. For example, say your non-owner's policy has $30,000 in property damage, the owner of the car you're driving has $10,000 in property damage liability, and when you borrow the car you cause a collision that results in $20,000 worth of damages. There is now $10,000 left unaccounted for that needs to be paid off. Without non-owners insurance, you or the owner of the car will have to pay the $10,000 out of pocket, but if you do have non-owners insurance then it would kick in to cover the extra $10,000.

What Are My Options? you may be asking.

A non-owners car insurance policy is not your only option. You also have the option of buying an umbrella policy if you feel the need for higher liability limits. It's always best to speak with a trusted agent before you make these important decisions. Begin by entering your zip code below or call 855-214-2291.

Compare Insurance Quotes

Be sure to check non-owner auto insurance quotes just as you would with a traditional insurance policy and anything else you may be concerned with. You should call to get non-owner's auto insurance rates from at least three different companies to see who has the best deal on the coverage you need. SmartFinancial can help drivers compare auto insurance policies and quotes with over 200 insurers to help you make an informed decision!

Get a Free Auto Insurance Quote Online Now.

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