What Is Non-Owner Insurance?

Woman and dog in a car
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Not many people know car insurance can be purchased for the times when they do not own a car. A non-owner auto insurance policy covers you for liability when you do not own a vehicle. It is purchased per driver, so multiple drivers are not covered under one policy. While most non-owner auto insurance policies do not provide coverage for medical or any physical damage, however, it is possible to find medical coverage depending on the car insurance carrier.

Should I Have a Non-Owner Insurance Policy?

There are several times that it makes sense to purchase this type of coverage—and many times when it doesn’t. If you rent a car frequently, it might make sense to purchase this type of coverage rather than shelling out at the rental counter. If you drive your friend’s cars often, it is also a good idea to have this kind of coverage.

However, if someone else in your household owns a car you plan on driving, you shouldn’t get a non-owner policy—rather, you’ll need to be listed on their policy.

Benefits of a Non-Owner Car Insurance Policy

Non-owner auto insurance policies are available everywhere but do not get talked about very often. Many people have never heard of an auto policy for a person who does not own a vehicle. It is always recommended to avoid a lapse in car insurance coverage, if at all possible. A non-owner auto insurance policy can protect you for those times when you do not own a vehicle:

  • Protection for liability is important even if you do not own a vehicle. A lot of things can go wrong while driving. A non-owner auto insurance policy would protect you if you do not own a vehicle and you borrow a friend's vehicle. If your friend had minimum liability on a vehicle and you caused a severe accident, the injured party could go after you personally for pain and suffering if the damages are more than your friend's limits. A non-owner auto insurance policy would kick in and pay the excess damages.
  • You can save money on a rental car. Rental companies charge a lot for their insurance coverage. If you frequently rent a car but do not own a car, a non-owner auto insurance policy will most likely save you money. You will still need to purchase the collision damage waiver so physical damage will be covered (or check with your credit card company—some offer this coverage if you book using your card), but in general, the non-owner auto policy will extend liability. As with most car insurance coverage, rules can vary by state and insurance carrier but typically a non-owner policy will cover liability for a rental car.
  • Keep your preferred driver risk status. A great benefit of purchasing a non-owner policy is to protect your driver risk status. Many insurance companies consider drivers with no prior insurance high risk. A non-owner auto policy would prove you had financial responsibility as a driver without an owned vehicle. This means you will pay a lower rate on car insurance when you purchase a car.

Keep in mind, non-owner policies do not cover the following:

  • Physical damage: A non-owner policy never covers physical damage on any vehicle.
  • Vehicles you own: Do not forget to convert your non-owner auto insurance policy into a traditional auto policy once you own a vehicle. Non-owner auto insurance will not cover a vehicle you own.
  • Vehicles owned by a resident of your household: If someone owns a vehicle in your household, you should be listed as a driver on their insurance policy as long as you do not own your own vehicle. A non-owner auto policy will not cover a vehicle you regularly access.