- Non-owner insurance is a type of auto insurance that covers someone who doesn't own the vehicle they're driving.
- This type of insurance is best for those who regularly rent or borrow cars.
- Non-owner insurance coverage kicks in after the owner's insurance coverage has been exhausted.
- The savings may not add up if you're driving a borrowed or rented car just a few times per month.
Definition and Example of Non-Owner Car Insurance
Non-owner car insurance is a type of personal auto insurance that covers drivers who don't own the car they're driving. This type of coverage can help cover some or all of the associated auto repairs or hospital bills if they get into an accident and cause injury or damage.
Let's say you borrow your friend's car. Your friend carries the state’s minimum liability coverage. This includes bodily injury limits of $25,000 per person and $50,000 per accident. You hit another car carrying a family of four. Each person has $25,000 in medical bills. The total costs are $100,000. The car owner's coverage pays for $50,000. You, the driver, are potentially responsible for the remaining $50,000 in damages.
Mark Ahart, an independent agent with Ahart, Frinzi & Smith Insurance in Virginia, told The Balance that standard non-owner insurance coverage is $300,000 bodily injury/property damage combined. It acts as a type of umbrella coverage. So, it would cover the remaining $50,000 in damages if you had this amount of non-owner car insurance.
Chances are that you relinquished your car if your driver's license has been revoked or suspended. You can’t drive it without a license, but you can work to get insurance without a license by buying non-owner car insurance with an SR22 filing.
SR22 isn’t technically a type of insurance. It's a form filed with your state by your insurance provider as proof that you’re maintaining your state’s minimum auto liability insurance requirements. SR22 insurance requirements begin when the suspension ends if you’re trying to reinstate your driving privileges. You’ll have the chance to get your license status back while only paying for your state’s minimum auto insurance.
Other reasons why you might need SR22 insurance include:
- Driving without enough insurance
- DUI or DWI convictions
- Too many at-fault accidents or traffic infractions
- Repeat traffic violations within a short time frame
- Failing to pay court-ordered child support
- Pending an application for a hardship or probationary permit
Some insurers consider SR22 drivers to be high risk. This may result in a surcharge on your auto insurance.
SR22 insurance won’t automatically drop when you no longer need it. You must ask your insurer to remove the filing from your auto policy. Contact your state department of motor vehicles to determine how long you’ll need to carry SR22 insurance. You’ll need it for three years in most states.
How Does Non-Owner Car Insurance Work?
Non-owner insurance acts as secondary insurance to cover another person’s vehicle owner’s policy. It kicks in after the car owner's coverage has been exhausted. The non-owner driver could otherwise be legally responsible for any costs over the owner’s limits. Coverage through non-owner car insurance isn’t tied to a specific vehicle but rather to the person named in the policy.
This insurance is a form of liability coverage that pays for property damage or injuries sustained in a car accident. This type of policy offers uninsured motorist coverage to pay for damage caused when an uninsured driver causes an accident.
You may be required to have non-owner car insurance in some specific circumstances, such as if you have a prior history of DUIs.
What Does Non-Owner Car Insurance Cover?
Non-owner car insurance is a type of auto liability insurance that covers bodily injury if you're found to be at fault for an accident. It may cover expenses related to hospital treatment, medical bills, and legal fees. Liability insurance also covers property damage, such as to other cars and trees. With some non-owner policies, you can also include or add on:
- Uninsured and underinsured motorist liability coverage for injuries that you and your passengers experience in an accident caused by an at-fault driver who is uninsured or underinsured
- Medical payments or personal injury protection (PIP) coverage for injuries that you and your passengers experience in an accident for which you were at fault
- Roadside assistance
- Renter’s insurance
Depending upon the specifics of the insurer and the policy, non-owner car insurance may not cover:
- Spouses and other household members
- A car owned by you or your household family members
- Cars you use for business
- Medical expenses for yourself and your passengers if you’re at fault
You often can't buy coverage for physical damage with your non-owner insurance policy, also known as "collision and comprehensive coverages." The car owner’s policy should cover those costs. There are some specialty insurers that do offer theft and damage coverage for rental cars.
Non-owned policies and non-owner policies are not the same. Non-owned policies are commercial auto coverage that protects business owners. These are used when employees drive their own cars for business purposes, such as on sales calls or errands.
Do I Need Non-Owner Car Insurance?
Non-owner insurance isn’t a common policy. It's most often needed by four types of people.
You Frequently Rent Cars or Use Car-Sharing Services
Car rental agencies and car-sharing services such as Zipcar must offer the state's minimum amount of liability protection. This is required for their cars to be able to operate legally on the roads. But that may not be enough to cover serious crashes. You can often pay for more liability coverage from rental companies, but that can be expensive.
Non-owner insurance can be a cost-effective alternative. You may be able to decline any liability coverage that the rental agency wants to charge you for if you have it, depending on the state you're in. It can also depend on the agency you're renting from.
You still may want to take out physical damage coverage if you get a non-owner policy because you often rent cars. You can do this by accepting the car rental company's collision damage waiver (CDW). It’s not included in a non-owner policy. You can also check with your credit card company to find out whether your card includes rental car insurance. If so, check into what's included.
You Borrow a Car Often
What if you regularly borrow a car from someone else? You may want to extend coverage in case the car’s owner doesn’t carry high enough limits. "You don't always know which or how much insurance your friends or family members carry,” Ahart said.
You're Between Cars
You may think that you don’t need insurance coverage if you've sold a car and you're waiting to buy another, but carriers like to see that you haven’t had any gaps in coverage.
“Some individuals do opt to purchase the non-owner policy to maintain continuous coverage and have the best rates available when purchasing a new car,” Ahart said.
Non-owner car insurance is issued on a per-driver basis. You’ll have to buy your own policy even if you share a household with other drivers who don’t own vehicles.
"If you're driving a borrowed or rented car just a few times per month, the savings may not add up. However, if you're borrowing a friend's car 20 times per year or more, or renting cars more than 12 times per year, a non-owner policy might be a good idea," Ahart noted. You can always ask for a quote from an insurance agent. Then show them your potential rental policy to compare costs.
What if you're regularly driving a household family member's car or are a live-in employee such as a nanny or au pair? You can be added to an auto policy as a listed household driver in some cases, but you probably can’t get added to the auto policy of someone who isn't related to you, such as a roommate or a friend. Research non-owner insurance options in this case.
How To Get Non-Owner Car Insurance
Many car insurance companies offer non-owner car insurance, including:
- Acceptance Insurance
- Direct Auto
- Farmers Insurance
- State Farm
- The General Insurance
Describe exactly how often, where, and what you plan to drive (such as a rental car or a friend’s car). Be sure to include any out-of-state driving you do. Ask what the non-owner policy covers and about any coverage limits. Find out whether you can include additional types of coverage.
Not all insurers offering non-owner car insurance sell it in every state. Calling an independent agent might help save you time searching.
Policy rates will mostly depend on the amount of liability coverage you choose. They can also depend on your driving record. "Those who have speeding tickets and other violations or accidents, or who don't have a record at all, may face much steeper rates," Ahart said.
Frequently Asked Questions (FAQs)
How much is non-owner car insurance?
Where you live, your driving history, your age, and your coverage limits will all affect your non-owner car insurance rate. But you can expect to pay less than what you’d pay for similar liability coverage on a car you own.
Where can I get non-owner car insurance?
Most insurers sell non-owner car insurance, but coverage may not be available in your state. Contact an insurance agent or your insurance carrier directly. You typically can't choose this option through an online quote tool.
Which is cheaper, non-owner or non-drivable car insurance?
These insurance products are for two different purposes. You can consider non-owner insurance if you don’t have a car, but you want to use other cars such as rentals or your family member’s vehicle. Non-owner car insurance wouldn't be appropriate if you want to insure a car that isn't drivable.