For those who don’t own a car but still drive on occasion, buying coverage in the form of non-owner car insurance might be a wise decision. This type of policy offers liability protection when you get behind the wheel of a car that doesn’t belong to you. But is it actually a necessary purchase?
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Why You May Need Non-Owner Auto Insurance
Unlike traditional auto insurance, non-owner policies are designed to provide coverage to drivers who don’t own a vehicle themselves. You may need to consider one of these policies if you:
- Borrow cars from friends or extended family members, or
- Rent cars often and don’t want to constantly pay for coverage through the rental car company.
Now, non-owner auto insurance isn’t designed for drivers who borrow vehicles from immediate family or housemates.
Let’s say you’re borrowing the car from someone who lives in the same home as you, or from a parent or sibling. If it happens on rare occasions, their existing auto insurance will typically still offer coverage while you’re behind the wheel, as long as they’ve given you permission to drive the car. If you’re going to be using that vehicle often, however, you will actually need to be added to their policy as an authorized driver.
Another reason to consider purchasing non-owner auto insurance is if you don’t own a car and want to have your driver’s license reinstated.
If your license has been suspended due to a DUI or other offense, you are often required to show proof of auto insurance coverage before it can be reinstated. However, if you don’t own a vehicle, this can be tricky.
Non-owner insurance gives you a way to buy state-minimum coverage without owning a car, so you can get your license back. Some insurance companies will even offer SR-22 non-owner policies if a certificate of financial responsibility is one of your reinstatement requirements.
Lastly, non-owner car insurance may be a wise purchase even if you don’t plan to drive for a while. Say you’re going to be traveling abroad for a year and won’t have a vehicle. While canceling your auto insurance coverage for that time period may sound like a smart money move, it does create a lapse in insurance coverage.
When you go to purchase a new policy later on, you may find that your quotes are higher due to the months you were uninsured–even if you weren’t driving during that time. To avoid a lapse in coverage, you may just want to purchase an affordable non-owner policy.
What Non-Owner Insurance Covers
When purchasing a typical auto insurance policy, you can choose from a mix of coverage options. These include liability coverage, collision and comprehensive protection, uninsured motorist coverage, and/or personal injury protection (PIP).
With non-owner auto insurance, however, you are a bit more limited.
Non-owner coverage is primarily designed to provide liability protection when you’re behind the wheel of a car. This means that if you are at-fault for an accident, it will pay for any bodily injuries and property damages you may have caused, up to the policy coverage limits.
Some insurance companies will also give you the option to add underinsured/uninsured motorist protection. This type of coverage will pay out for medical bills or damages in an accident caused by another driver if they are uninsured or don’t have enough coverage to pay for everything.
Lastly, in some states, you are able to purchase non-owner insurance that includes PIP, or personal injury protection. This covers you as the driver, regardless of which vehicle you are in–even as a passenger–and who is at-fault for an accident.
If you are at-fault, PIP can help cover your medical bills. In many cases, it will also provide for things like lost wages or household costs (such as lawn maintenance) while you recover.
If you aren’t at fault, the other driver’s insurance should cover your medical expenses. However, there are many situations where medical bills exceed coverage limits, or the at-fault driver’s insurance company disputes liability for the accident. Additionally, their insurance will often refuse to pay for extra expenses, such as income lost.
With non-owner coverage, you may be protected against all of these, even if you’re driving a car that is not your own.
What Non-Owner Insurance Doesn’t Cover
There are definitely some limitations to non-owner auto insurance, however.
As mentioned, non-owner policies won’t cover you if you are driving a vehicle that belongs to someone in your own home. Instead, you need to be an authorized driver on their existing insurance policy.
Additionally, non-owner insurance does not offer comprehensive or collision coverage. Because the policy is attached to the driver, and not a specific vehicle that they own, insurance companies are unwilling to provide full coverage.
Finally–and this seems like a no-brainer –you cannot buy non-owner car insurance if you own a car.
How to Buy
As non-owner insurance policies are less common than traditional policies, you may find that they are trickier to find.
In fact, many insurance companies don’t even provide non-owner coverage. Of those that do, they typically can’t be purchased online like normal policies. Instead, you’ll probably need to call up an agent in order to get a quote and move forward with buying coverage.
Some insurance companies that do offer non-owner insurance include Allstate, Progressive, USAA, State Farm, Safe Auto, and Nationwide. This isn’t a comprehensive list, of course, but offers you a place to start in your search.
Even if you don’t own a car, auto insurance may still need to stay on your radar. With non-owner insurance, you are protected anytime you borrow or rent a vehicle, can show proof of insurance in order to reinstate a license, and easily avoid a lapse in coverage that can haunt you in the future.