What is Non-Owner Car Insurance? A Useful Guide
Nearly every state in the US requires drivers have some car insurance coverage when driving. Driving without insurance is illegal in most places because people need protection in case of an accident.
Even if you don't own a car but drive a car, you must have insurance. However, you can get covered with non-owner car insurance.
To learn more about a non-car owner insurance policy, keep reading. This article will tell you everything you need to know about it.
All About Non-Owner Car Insurance
In simple terms, non-owner car insurance provides liability coverage for someone driving a car they don't personally own. If you cause an accident, the insurance covers bodily injury and property damage for the other driver and their passengers. It will also protect you from lawsuits on the victims' behalf.
Often, non-owner car insurance is less expensive than auto insurance liability coverage. It also doesn't typically have a deductible. But, legally, not everyone can purchase this type of insurance. Each car has a primary policy that covers its drivers.
Sometimes a non-car owner policy can include medical payments or personal protection coverage. That means the policy will cover you and your passengers' medical bills regardless of who caused the accident.
It may also include uninsured or underinsured motorists and rental car liability coverage. If someone causes an accident with you and doesn't have liability insurance or enough insurance to cover the damage, you will still receive coverage.
What Isn't Covered?
Non-owner car insurance doesn't include comprehensive coverage. This includes theft, fire, flood, vandalism, and more. Theft refers to car theft and theft of personal belongings in the car.
If you experience personal belonging theft, you will have to cover the costs or inquire with your homeowner's insurance if you have coverage.
Additionally, it doesn't include collision coverage. Thus, if you cause an accident, the car you are driving isn't covered. Neither are your medical bills. Or the medical bills of your passengers.
However, as mentioned, you may be able to add medical payments or personal protection coverage at an extra cost. Then this would cover your injuries.
It's important to note that individuals purchase non-owner car insurance for themselves. So, it only covers that one person on the policy. For instance, you buy non-owner car coverage, but your spouse doesn't. Only you receive coverage. If you and your spouse don't own a car but want non-owner coverage, you both need to purchase a plan.
As you can see, it's not the same as traditional car insurance, where the car itself has a policy, and the vehicle has a primary driver. A standard auto plan covers the owner of the car and anyone else who drives the car. In addition, the owner can add their spouse or children to the auto policy as secondary drivers.
And, if a friend borrows the car, the owner's insurance will cover a collision if it occurs.
However, a non-owner car insurance policy will not cover anyone else except the holder of the policy.
Who Uses Non-Car Owner Insurance?
Some people benefit from having a non-owner car insurance policy. For example, if you frequently rent cars or use car-sharing services, it's great. You don't have to buy liability insurance from a car rental or car-sharing company.
Often, the rental company auto insurance is expensive. Including insurance in your rental package can easily double the price of the rental. For frequent car renters, you save money by using non-owner car insurance.
Car-sharing companies usually only have the minimum liability car insurance the state requires, so if there is an accident, you will be liable for the remainder of the expenses. This could be tens of thousands of dollars in damages.
People who have a gap in car ownership or driving should also consider getting a non-owner car insurance policy—for example, people who own a car but are traveling overseas for an extended period.
Insurance companies see a coverage gap as high risk. Even if you don't own a car, they still want to see consistent coverage for someone with a valid driver's license. Or else, you may face higher premiums.
Finally, if your state requires you to file an SR-22 form because you committed a serious traffic violation or received a DUI, then you will want to look into non-car owner insurance too.
Non-Owner SR-22 Insurance
Your state DMV may require you to have your SR-22 filing attached to an auto insurance policy to get your license back. Those needing an SR-22 form who don't own a car need to choose a non-owner car insurance SR-22 policy.
You cannot file an SR-22 yourself. Instead, an insurance company must file one on your behalf. So, if you want to have your license reinstated but don't own a car, non-owner insurance is the way to go.
The state requirements may also force you to get coverage with higher limits. Insurers call this high-risk auto insurance. Moreover, you may need to keep this specific coverage for a few years for your license to remain valid. States usually require high-risk insurance for between two and five years.
Those needing SR-22 insurance will have higher rates than others seeking this insurance coverage. But, the premiums will be lower compared to a traditional car insurance policy.
Who Doesn't Use Non-Owner Insurance?
If you own a car, non-owner car insurance doesn't work for you. You will need a standard car insurance policy instead. Additionally, if you drive a car that someone in your household owns, you need to be listed on their insurance policy as a secondary driver.
For example, if you and your spouse, parent, or child share a vehicle and live together, you should be under one standard auto policy. As mentioned, non-owner car insurance is for an individual who doesn't have car ownership or regular access to a car.
In fact, many non-owner car insurance policies require that no one in the household has car ownership.
Furthermore, you don't need this insurance for driving a company vehicle. If you are driving for businesses purposes, the company and its insurance are responsible for covering accidents. Speak with your employer if you have concerns about their auto insurance.
For those that sporadically borrow a friend's car, non-owner car insurance isn't necessary. Your friend's insurance policy will cover you. But, you may still be responsible for paying to cover damages in an accident, depending on how much coverage your friend has.
Despite it not being necessary, some people have non-owner insurance as a backup or secondary insurance plan. Even though you don't need this type of insurance, it doesn't harm you if you have it. So, if you ever get in an accident in a vehicle that isn't yours, it will cover the additional damages not covered by the primary insurance plan.
Price Factors For a Non-Owner Insurance Policy
As discussed throughout the article, adding medical coverage to your policy will incur higher costs. But, if you want higher policy limits, you will also need to pay higher rates.
It's always best to have more coverage than your state's minimum requirement. If you cause an accident and don't have enough coverage, you will be responsible for paying the rest of the damages. It could mean tens or hundreds of thousands of dollars, depending on the severity of the crash.
Your driving history and age will also be significant factors in how much a non-owner car insurance policy will cost you. Drivers with few to no accidents and traffic violations pay less. Thus, anyone filing an SR-22 should expect to pay more compared to other non-owner car insurance policyholders.
Younger drivers with less experience should also expect to pay more than older drivers with more experience.
How much you drive and where you drive can also affect the price of your non-owner car insurance coverage. More time driving means more opportunities to get in an accident. The city or state you frequently drive in will also cause prices to fluctuate.
This is because insurance requirements differ by state, and some places have higher rates of accidents than others.
Where to Buy Non-Owner Car Insurance
Major insurance providers have non-owner car insurance options, as do smaller insurance providers. It's a standard policy for insurers to offer. But, you won't find pricing online. It isn't even easy to get a personal quote online from well-known insurance companies.
Typically, you need to call the company directly and speak to an insurance agent to get a quote. Some of the biggest insurers will only offer non-owner car coverage to existing customers. Therefore, it's best to call different insurers to gather quotes before selecting a company to purchase a policy from.
Get Covered Today
Having auto insurance is a must almost anywhere you drive in the US. But, even drivers who don't own a car can ensure they remain covered with a non-owner car insurance policy. It's easy for anyone with a valid driver's license to find an auto insurance policy that works for them.
If you need to file an SR-22, call us today at SR22 Savings to receive your free quote. Our insurance professionals will assist you in getting the lowest SR-22 insurance rate possible.