How Does Non-Owners Car Insurance Work?

Non-owner car insurance provides bodily and property liability coverage to people who do not own a car but plan to continue driving or who want to avoid a lapse in coverage. Additional coverage may include med pay, personal injury protection (depending on the state) and uninsured/underinsured coverage. Non-owner insurance typically will not include collision and comprehensive coverage. You may need a non-owner policy if you can’t afford to buy a car, regularly use someone else’s vehicle, regularly rent cars, need an SR-22 or are not driving for an extended period of time. Non-owner policies are offered by many of the major insurance providers and can cost between $200 - $500 annually, based on several factors, including your credit history, marital status, your occupation, driving history, deductible amount, resident state and additional coverages.

If you don’t have a car but need coverage, keep reading to see what a non-owner car insurance policy can do for you.

Key Takeaways Non-owner insurance is auto coverage for people who do not own a car. Non-owner insurance is purchased on a per-person basis, which means only you will be covered and not family members or those who live with you. Non-owner insurance offers bodily and property damage liability coverage and usually med pay, personal injury protection (depending on the state) and uninsured/underinsured protection. A non-owner car insurance policy does not provide collision or comprehensive coverage. You should consider non-owner insurance if you can’t afford to buy a car, regularly rent cars, regularly borrow cars, need an SR-22 or are not intending to drive for an extended period of time.

What Is Non-Owner Car Insurance?

Non-owner car insurance provides bodily injury and property damage liability insurance for those who don’t own a car but still drive. Bodily liability coverage gives drivers financial protection in case they cause an accident that causes physical harm to another person. Similarly, property damage liability coverage offers financial protection if they cause an accident that damages someone else’s vehicle. Non-owner vehicle policies may also offer med pay, personal injury protection (depending on the state) and uninsured/underinsured motorist coverage. People who should consider a non-owner policy are those who:

• Can’t afford to buy a car
• People who borrow vehicles from friends/family
• Regularly rent cars
• Need an SR-22
• Are not driving for an extended period of time and want to avoid a lapse in coverage

A non-owner policy can be a cheap car insurance alternative to traditional car insurance policies, costing between $200 - $500 a year.

How Does Non-Owners Insurance Work?

Non-owner car insurance provides auto coverage for people who do not own a vehicle and is bought on a per-person basis. This means you are the only one who will benefit from coverage. Other people in your household will not be protected by the non-owner policy. Those with this plan will receive liability coverage for property damage and bodily injury and possibly med pay, personal injury protection and uninsured/underinsured motorist coverage. Unfortunately, there usually isn’t comprehensive or collision coverage on a non-owners car insurance policy.

If you are in an accident, filing a claim against a non-owner policy is similar to filing a claim against a standard auto plan so take these five steps immediately:

1. Call the police
2. File/request a copy of the police report
3. Collect information from anyone involved
4. Take pictures or videos of the damage to the vehicle you were driving and the vehicle/property of anyone else involved
5. Contact your insurance provider

There usually isn’t a deductible for a non-owner plan so you won’t have to pay anything out-of-pocket before your insurance kicks in. The premiums are also reasonable, being as low as $200 a year.

What Does Non-Owners Car Insurance Cover?

A non-owner car insurance policy offers the following coverage:

• Liability coverage - Liability coverage is required in most states except New Hampshire and Virginia*. It is divided into two types, bodily injury liability coverage and property damage liability coverage. Bodily injury liability coverage helps cover medical costs for those who are injured in a car accident that you are responsible for. Property damage liability coverage helps cover the costs of repairs or replacement of property in a car accident you are responsible for.
• Medical payments coverage (Med Pay) - Medical payment coverage helps pay for the costs associated with medical bills or funeral costs for you or your passengers if there is an injury or death due to an accident regardless of who is at fault.
• Personal injury protection (PIP) - Personal injury protection helps provide financial support towards costs you or your passengers incur due to a covered accident. Costs include childcare, grocery delivery fees, lost income or medical expenses. States that require this coverage are:
• Delaware
• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Pennsylvania
• Texas
• Utah
• Uninsured and underinsured motorist coverage - Uninsured and underinsured motorist coverage provides protection to you in the event you're involved in an accident that is caused by someone who does not have car insurance or by someone whose auto insurance is not adequate enough to cover the damages you incurred.

Note that a non-owner auto policy will most likely not offer collision or comprehensive coverage. This means if you’re in a car accident,  the vehicle is damaged by a fire, falling object, explosion, earthquake, windstorm, hail, flood, vandalism, riots or collision with an animal, your vehicle will not be replaced or repaired through your insurance.

Non-owner car insurance provides bodily injury and property damage liability insurance for those who don’t own a car but still drive

If the vehicle you’re driving belongs to a friend, their insurance would likely cover the replacement or repair damages. If the vehicle is a rental, and you signed a collision damage waiver (CDW), the rental company will not charge you for repairs or replacement of the car.

*Virginia residents must pay the uninsured motorists vehicle (UMV) fee to the state Department of Motor Vehicles, otherwise, insurance would need to be purchased.

How Much Does Non-Owner Insurance Cost?

A non-owner policy can be a cheap car insurance alternative to traditional car insurance policies, costing between $200 - $500 a year. This coverage is typically less expensive than a traditional auto policy because insurance carriers see people who don’t own vehicles as less of a risk because there isn’t regular access to a car. There are several factors that are used when calculating your rates. They include:

• Your credit history
• Your marital status
• Your occupation
• Driving history
• Deductible amount
• Your state
• Additional coverages

When Should You Consider Non-Owners Insurance?

You should consider non-owner insurance if:

• You can’t afford to buy a car - You need car insurance if you’re intending to drive whether you can afford a car or not. Most states require at least liability coverage. The exceptions are New Hampshire and Virginia. Those who live in Virginia will be required to pay an uninsured motorist vehicle (UMV) fee, otherwise, they will be required to get coverage.
• You regularly rent cars - Non-owner car insurance is a cheaper way of getting auto coverage than rental car insurance, which you pay per day. Non-owner insurance can cost as low as $200 a year. For those who rent on a constant basis, paying for rental insurance every day can become very expensive. You should ask your provider if a non-owner policy will cover a rental car. Also, see if your credit card company has rental insurance that provides a collision damage waiver (CDW) or loss damage waiver (LDW). These aren’t insurance, but instead are agreements that the rental company will not seek reimbursement for damages caused to the vehicle. If this is offered, you'll need to pay for the rental with that credit card. If your credit card company doesn’t have rental insurance, consider buying rental insurance through the rental car company which provides a CDW.
• You need an SR-22 - An SR-22 is a form filed by your insurance provider that shows the government you have adequate insurance. If the court requires you to have an SR-22 (or FR-44 for Florida and Virginia residents), but you don’t have a car, a non-owner auto policy could be a cheap and easy way to meet that requirement. An SR-22 is often required for those who have been convicted of a DUI, have been caught driving without a valid driver’s license or were found driving a vehicle without proper insurance.
• You’re not driving for an extended period of time - Getting a non-owner auto policy can help prevent a lapse in coverage. A lapse in coverage occurs when you go without insurance for a period of time after having previously had insurance. Most carriers will raise your rates when you apply for coverage after having not had any. This is because you will be seen as a risk. By maintaining non-owner insurance you can help keep your rates lower when you are ready to purchase a standard auto insurance policy.

For those who occasionally borrow vehicles from family or friends, you may be covered through permissive use. This means the insurance of the person the car belongs to will extend to you while you are using the vehicle. However, this is not a replacement for you having your own policy. As stated above, you could have a lapse in coverage if you go without insurance which will most likely cause your rates to go up when you do get auto coverage.

Unfortunately, there usually isn’t comprehensive or collision coverage on a non-owners car insurance policy.

Who Doesn't Need Non-Owner Car Insurance?

You may not need a non-owner policy if:

• You own a car - Owning your own car means you will need a traditional auto policy.
• You are listed on someone else’s auto policy - Being listed on someone else’s plan means you are covered by their insurance provider making a non-owner policy unnecessary.

Which Companies Offer Non-Owner Car Insurance?

There are several insurance companies that offer non-owner car insurance. They include:

• Acceptance Insurance
• American Family
• Dairyland
• Direct Auto
• Farmers
• Liberty Mutual
• Nationwide
• State Farm
• Travelers
• USAA (only for veterans, active duty military and their families)