What Is Non-Owner Car Insurance?
A major rating factor for auto insurance is whether or not you have had any prior lapses in coverage. According to Bankrate, consumers can expect to pay 10% more for their insurance with a previous lapse. Even a lapse of a few days can cause rates to skyrocket. So how should customers navigate this when they don’t own a car?
As a decades-long insurance veteran, I always recommend non-owner insurance for these situations. This lesser-known policy covers you as a driver, regardless of what non-owned car you drive, and is useful in many scenarios. But its most important feature is that it prevents you from having a lapse in coverage, and keeps your insurance premiums low.
Key Takeaways
Non-owner policies cover you as a driver when you’re using a car you don’t own
It acts as secondary coverage that kicks in if the primary insurance coverage is insufficient.
Non-owner policies also prevent lapses in coverage while you are in between cars and can save you money on your next insurance policy.
Not everyone has a need for a non-owner policy, but it can be useful for certain individuals.
What Is Non-Owner Car Insurance?
Non-owner car insurance is a type of insurance policy that covers you if you are driving a car you don’t own. For example, it can cover you using a rental or borrowing someone else’s car. It is typically purchased when you don’t own a car or have an insurance policy that would cover your use of other vehicles.
While insurance typically follows the car and not the driver, there may be scenarios where it is helpful for you to carry a non-owner policy. Specifically, if you do not own a car and don’t carry insurance, a non-owner policy allows you to have secondary insurance coverage in case the limits of the borrowed car are insufficient or non-existent. Additionally, it keeps you insured between vehicles so there is no lapse in coverage.
How Does Non-Owner Car Insurance Work?
Non-owner car insurance is secondary coverage to whatever non-owned vehicle you drive. For example, if you borrow a car from a friend, their car insurance would be primary for any damages. Your non-owner car insurance coverage would kick in if the primary insurance is insufficient.
Suppose you are driving a borrowed car, with liability limits of $25,000 for property damage, and you have a non-owner policy with a property damage limit of $50,000. If you got into a car accident where the property damage was $35,000, the coverage for property damage would max out at $25,000 on the borrowed vehicle’s policy. The remaining $10,000 in damages would come from your non-owner policy.
According to the Insurance Research Council, 15.7% of drivers don’t have sufficient coverage on their auto insurance. With the potential risk of having to pay out of pocket for damages you may cause in someone else’s car, it’s worth purchasing non-owner car insurance for peace of mind.
Can I Get Car Insurance Without A Car?
You can get car insurance without a car via non-owner insurance. This policy is offered to licensed drivers who do not own a vehicle but may have access to one and want liability insurance. It is often less expensive than insuring a vehicle and it provides coverage for you as a driver, regardless of whether you rent or borrow a car.
Note: If you are using someone else’s car regularly, you may need to be added as a driver to their insurance policy for coverage to apply. Be sure to check with their insurance company to ensure you are complying with their requirements.
Can I Insure A Car Not In My Name?
In general, you cannot insure a vehicle you do not own. Insurance exists to make you financially whole after a loss. If you have no financial interest in a vehicle, you would not be able to insure it and potentially profit from a claim. The only way to obtain insurance for a car you don’t own is by purchasing non-owner car insurance.
Note: The exception to this rule is when you first purchase a vehicle. Most states require proof of insurance in order to register a car, so you may need to purchase a policy prior to completing the registration. However, your name should be on the title as well.
What Does Non-Owner Car Insurance Cover?
Non-owner car insurance protects the driver and not a specific vehicle. In this way, the coverage provided is similar to liability coverage on a standard auto policy. There is no coverage for the car that the policyholder is driving.
While the exact coverage offered can vary by company and state, most provide the following:
- Bodily Injury- Bodily Injury coverage provides reimbursement for injuries you cause to another party. Most companies will offer this coverage on a per-person and per-accident basis.
- Property Damage- This coverage provides reimbursement for any damage you cause to another person’s vehicle or property.
- Uninsured Motorist- If you are hit by someone who doesn’t have insurance, uninsured motorist is the coverage that pays for any bodily injury or property damage you sustain.
- Underinsured Motorist- In the event you are hit by someone who doesn’t have enough insurance to cover your damages, underinsured motorist pays for the bodily injury or property damage that results.
- Medical Payments- Medical payments coverage pays for any injuries that you or anyone in your vehicle sustains due to a car accident. This coverage is paid out regardless of fault.
- Personal Injury Protection (PIP)- Similar to medical payments, personal injury protection (PIP) provides coverage for bodily injury that you or anyone in your car incurs after an accident. However, PIP provides broader benefits, such as lost wages and funeral expenses.
Since insurance typically follows the vehicle and not the driver, any coverage provided by a non-owner insurance policy is secondary. The insurance on the car being driven would be primary.
What Does Non-Owner Car Insurance Not Cover?
Non-owner car insurance does not cover the car you’re driving if you damage it in an accident. Comprehensive and collision coverages are not offered. This means that if you drive a borrowed car and get into an accident, your non-owner car policy will not provide any coverage, even on a secondary basis.
Similar to a standard auto policy, there is also no coverage if you use a vehicle for commercial use.
Note: Company vehicles provided to employees for their use on the job may also be used personally. The type of policy that covers this exposure is called non-owned car insurance and should not be confused with non-owner car insurance.
How Much Does Non-Owner Car Insurance Cost?
Because the coverage is less broad, the price of a non-owner insurance policy is less expensive than a standard auto policy. Consumers can expect to pay 5%-15% less for non-owner insurance with similar coverage. A non-owner car policy can range between $200-$1,200 annually depending on the state and coverage selected.
The following are five companies and their annual premium for non-owner car insurance.
| Company | Average Annual Premium |
| Frankenmuth | $1,980 |
| State Farm | $2,556 |
| Geico | $6,252 |
| Progressive | $7,872 |
| Farmers | $8,100 |
Who Needs Non-Owner Car Insurance?
Not all drivers need non-owner car insurance. In fact, it is only recommended for the following:
Drivers Who Borrow Vehicles
If you do not own a car but borrow vehicles either from friends or family, a non-owner car insurance policy may be appropriate. The car you borrow should carry liability insurance but a non-owner policy will step in if the damages exceed those limits, rather than you having to pay out of pocket.
Drivers Who Regularly Rent Vehicles
Rental car companies offer insurance to their customers for a small fee. If you frequently rent cars, purchasing a non-owner car insurance policy to cover these vehicles may be more economical than buying insurance with every rental.
Drivers Who Are In Between Vehicles
Most auto insurance companies base your insurance price on whether you have had any prior lapses in coverage. Even a small gap in insurance can cause a rate increase when you do eventually get a new policy. To avoid this increase, obtain non-owner insurance in the interim.
Drivers Without A Car Who Need Proof Of Insurance
Many states ask for proof of insurance to reinstate your driver’s license if it has been suspended or revoked, or if you need an SR-22. A non-owners policy can satisfy these requirements without owning a vehicle.
Who Offers Non-Owner Car Insurance?
While numerous car insurance companies offer non-owner insurance, quotes are not typically provided online. Most will require you to call to purchase a policy. Here are some of the top carriers of non-owner car insurance and their phone numbers.
| Company | Phone Number |
| USAA | 1-800-531-8722 |
| GEICO | 1-800-861-8380 |
| Nationwide | 1-877-669-6877 |
| Progressive | 1-888-671-4405 |
| Liberty Mutual | 1 (800) 290-8711 |
Some of the other companies that offer this type of insurance are as follows:
- American Family
- Dairyland
- Farmers
- Auto-Owners
- Acceptance Insurance
- Elephant Insurance
How To Get Non-Owner Car Insurance
Purchasing a non-owner car insurance policy is an easy and seamless process. Similar to purchasing any standard auto policy, it requires the following steps:
Obtain Necessary Information
The first step to obtaining non-owner insurance is to gather all the pertinent information that a carrier may need. Some of the information you will need includes your driver’s license number, the dates and specifics of any accidents or violations you may have had, and the limits of coverage you want quoted.
Research Companies
Once you have obtained the information needed, your next step is to research which companies you would like to quote. Not all insurance companies offer non-owner policies, so you will have to find one that does. In addition, you may want to confirm the financial stability and overall rating of the company to ensure you are choosing the best one for your circumstances.
Call for Quotes
Since most companies won’t allow online quoting for non-owner policies, your next step is to call the carriers you’ve identified that write them. Be prepared with the information you’ve obtained in Step 1 to ensure an accurate quote.
Compare Policies and Purchase
After getting quotes from at least three different carriers, the next step is to compare policies. Price is certainly important but it shouldn’t be your only factor. You should also consider the company and which one might be best for you.
FAQs
What does ‘non-driver’ on insurance mean?
Seeing “Non-Drivers” on an insurance policy usually denotes a driver who lives in the household but has an impairment that prevents them from driving. This can be seen for elderly relatives who have turned in their licenses or others who may have impairments and can’t drive.
Does non-owner car insurance cover rental cars?
Yes, non-owner car insurance can cover you if you are driving in a rental car. These types of policies are a good option for those who rent cars on a regular basis as it’s more cost-effective than purchasing the loss damage waiver from the rental company every time.
What should I do if I have non-owner car insurance and I buy a car?
Non-owner car insurance policies are for drivers who don’t own a car. If you buy a car, you will need a standard auto policy to protect the vehicle. Once insurance has been purchased for the car, you can cancel your non-owner policy.
