What is Non-Owner Car Insurance?

Non-owner car insurance is a kind of insurance policy. Non-owner car insurance provides liability coverage when you are renting a car or even borrowing one from somebody else. This liability coverage pays for the injuries and the property damage that may be caused by other drivers and their passengers by your negligence.

This policy is sometimes used for high-risk drivers who could have been required by the state to have a liability policy in order to keep their driver’s license. Many have this policy in order to keep their continuous coverage and others who rent cars frequently. A non-owners policy is generally much cheaper than the owner's one: it costs around $200-$300 annually. It is cheaper because it is less risky for insurance companies than a car owner who drives on an everyday basis. The premium amount also depends on various factors such as where you live, your driving record, and other usual factors.

In order to have this policy, the most insurance company will require that you must have:

• A valid driving license
• That you do not own a vehicle
• Some insurance companies may also require that no one else owns a vehicle in your family either, so you do not have access to one all the time.

Why would you want a non-owner policy?

This policy is especially for those who rent cars often to drive. It serves as primary liability coverage although you would still have to buy the collision damage waiver in order to pay for the repairs in case there is a need for the rented car. It also reduces the gap that may exist in your insurance history when you decide to buy your next car, and your car insurance policy by buying this coverage in order to maintain the continuous coverage so you are not labeled as a high-risk driver.

This policy is also needed in order to satisfy the conditions to reinstate or receive your driving license again if you have been a high-risk driver. If you are, for example, required by the state to have an SR-22 or an FR-44 (this is a guarantee on the part of the insurance company that your coverage is current). Non-owner car insurance can also satisfy that requirement even if you do not have a car of your own.

So it may be possible that you do have a car but you need to file the SR-22 or FR-44 in order to fulfill the state requirements. You might already have a car and an insurance policy intact for that car, but you might still need to file that SR-22 / FR-44. Your current insurance company might not be offering that coverage, so you will go to another company that does, and purchases a non-owners policy separately just so you can meet the requirements of the state. The extra cost that you will be incurring is generally quite low because the other new policy is not covering your car.

What does a non-owner policy cover?

The non-owner policy generally covers two types of insurance policy: the bodily injury liability and the property damage liability. However, some insurers also offer other features as part of this policy such as:

• Coverage for medical payments
• Uninsured motorist bodily injury
• Underinsured motorist bodily injury coverage

However the car is obviously not insured in this policy, so the company will not be offering the following types of coverage in this:

• Comprehensive coverage
• Collision coverage
• Labor and towing
• Custom parts and equipments coverage

This non-owner's policy does not cover for repairs to the vehicle that you borrow. Alternatively, you would have to make sure that the person you borrowed the car from has a policy that will extend to you as well as the primary coverage.

This non-owner coverage would only pay till the owner's coverage limits are exhausted and then it only covers the damages that are caused on the car or the person you hit.

Who should not buy non-owner car insurance?

You should not be buying this policy if the following applies to you:

• You are a car owner
• If there is a car in your house or in your family. In this case, you could be placed in the car owner’s policy as a driver for coverage rather than getting a non-owner policy of your own. It may be the case especially if your partner owns a car and the insurance company will consider their vehicle as part of your property.
• If you have a car at your disposal all the time or if you drive a car on a regular basis. It might not be your own car, but someone else's; you can find an insurer who can place a regular auto insurance policy on that car.
• If you are driving a car for business purposes. It will come under the commercial non-owner's policy.
• If you do not have a driving license and if you can’t get one within a month of starting a non-owner’s policy.

How much does non-owner car insurance cost?

Usually, the non-owner's policy is cheaper to get than the regular insurance policy but the prices vary from company to company. The non owners car insurance quote may differ so much that it can range from 10% to 80% of the price you would pay for the regular policy. A lot depends on how much access the person has to a car that will be in use.

According to studies conducted by experts, men usually get charged higher premiums for this policy and even higher for an entire coverage for a car he owns. Women would also pay more for coverage of their own car and less as non owner's liability but definitely pay much less than men for both policies.

How do I buy a non-owner auto insurance policy?

This non-owned car insurance policy is applied for the same way you would apply for an owner's policy. However not all auto insurers sell this policy as it is not considered standard.

If you already have non-owner insurance or non-drivers insurance, and you decide to purchase a car now, you will have to let your insurer know at once. You will be required to change your policy from the non-owners auto insurance policy to the owner's policy, which will provide insurance coverage to your new car; or else, you would not have an insurance coverage policy for your new car.