Do you own a car? Then you have car insurance. Duh. It’s the law, and it’s just common sense.
But what if you don’t own a car? You still have a driver’s license because you might want to drive sometimes—like when you borrow your buddy’s truck to make a Costco run. But you don’t need a car every day.
In fact, most days you take the bus downtown to work or school. But maybe you rent a car while you’re on vacation. Or maybe your extremely kind neighbors let you borrow their minivan to pick up your parents from the airport when they visit. Maybe you even occasionally use a car share service to take a weekend road trip. If any of these scenarios sound familiar, then maybe non-owner car insurance is for you.
What is non-owner car insurance?
First things first: Non-owner car insurance is auto insurance for people who don’t own a car but occasionally drive one. A non-owner policy typically covers the minimum amount of liability insurance your state requires for you to operate a car. This could include:
- Liability coverage: This covers property damage and injuries you cause to others not including your passengers.
- Uninsured/underinsured motorist coverage: If you get hurt in an accident caused by a driver who doesn’t have any insurance (or doesn’t have enough liability insurance to cover your medical expenses), you’re covered.
- Major medical/personal injury protection coverage: This pays your medical bills if you get hurt in a wreck, no matter who’s at fault.
Non-owner auto insurance does not include collision or comprehensive insurance (since you don’t actually own a vehicle). Those would be included in a regular policy for someone who owns a car.
First things first: Non-owner car insurance is auto insurance for people who don’t own a car but occasionally drive one.
Who needs non-owner car insurance?
This is kind of a specific market. Usually, you either own a car or you don’t—and if you own a car, you make sure to get car insurance. But if you don’t own a car, there are still some circumstances under which you’d want insurance. You might want—or need—non-owner insurance if:
- You need to file an SR-22 form to get your license reinstated. This is most commonly necessary if you’ve had your licensed revoked because of something serious like a DUI conviction. In order to get your license reinstated, you need your insurance company to file one of these forms on your behalf.
- You need to show proof of insurance to get or reinstate your license. If you let your driver’s license expire, some states require you to show proof of insurance before you can get a driver’s license.
- You use a car-sharing service. If you use a service such as Zipcar or car2go to make the occasional road trip or pick up groceries, a non-owner policy could be a good way to supplement the insurance provided by the service. Their policies typically offer the least amount of coverage allowed by the state. So if you cause a really bad wreck, you’ll want the extra coverage.
- You rent a lot of cars. If you travel for business frequently and rent often enough, having non-owner insurance could be cheaper than the liability insurance you pay for at the car rental counter. It won’t cover damage to the rental car, but you can usually get the collision damage waiver for that.
- You borrow other people’s cars a lot. The owner’s insurance should pay any accident claims but, again, if you cause a huge pileup that exceeds their policy’s liability limits, you better believe the other drivers are coming after you.
- You’re only temporarily without a car and don’t want to have a lapse in insurance. Let’s say you’ve received a fellowship to teach at a university across the country. It’s a great opportunity, but you don’t need a car. So you sell yours and use the money to pay the deposit on your apartment. You know that in two years when the fellowship is over, you’ll be moving back and you’ll want to buy a new car. It could be a good idea to get non-driver insurance for those two years because insurers look at lapses in coverage when assessing a driver’s risk. Non-owner insurance will help you fill that two-year gap and avoid higher premiums when you get back behind the wheel.
Now, one last thing, and this is important: Non-owner insurance does not cover you if you borrow a car from a close relative you live with. If that’s the case, you should be on their insurance policy (and just pay them). This also might apply to a car that belongs to your roommate who is not a relative. It really depends on your state and/or your insurer. Besides, if you have regular access to a car, it just makes sense to be on that person’s insurance.
How much does non-owner insurance cost?
This is the $64,000 question: How much does a non-owner insurance policy cost? The good news is that because (in the vast majority of cases) a non-owner policy is basically a liability policy, it’s way less expensive than a standard auto insurance policy for a car you own. And, as with all insurance, the bigger the deductible, the lower the premiums. So, if you have a healthy emergency fund, get the biggest deductible you can afford to pay. That way any repairs that are less than the deductible can be paid for in cash and you won’t need to file a claim. Not filing claims is a fantastic way to keep those premiums low.
The good news is that because (in the vast majority of cases) a non-owner policy is basically a liability policy, it’s way less expensive than a standard auto insurance policy for a car you own.
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Do you need non-owner car insurance?
If you find yourself needing non-owner car insurance, we can help! Our independent insurance Endorsed Local Provers (ELPs) are experts in all types of auto insurance and can help you get the coverage you need. They have the heart of a teacher, and they will sit down and help you get the best coverage for the best price. Because they can compare rates and policies across a large number of insurance providers, you can be confident they’re working for you and not some faceless company who will treat you like a number.
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