Non-Owner Car Insurance – Who Needs it and Who Doesn’t

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Insuring a car you don’t own? That doesn’t make any sense. 

Well, it does in certain circumstances. If you don’t own a car but plan to get behind the wheel of someone else’s car often or rent cars on a regular basis, there is such a thing as non-owner car insurance. It offers liability coverage when you don’t have a car, but drive one that isn’t yours. 

Pro Tip

If you frequently borrow a car from a close relative or someone in your home, don’t bother with non-owner car insurance. It’s usually better to be added to their policy as a driver.

“If you get into an accident and someone wants to sue you for that, you need that liability coverage to protect yourself financially,” says Laura Adams, an insurance expert and host of the “Money Girl” podcast.

Here’s what you need to know about getting a non-owner car insurance policy.

What Does Non-Owner Car Insurance Cover?

The main purpose of non-owner car insurance is to protect you if you’re driving a car you don’t own and get into an accident. However, non-owner car insurance coverage will only protect you against certain events, such any injuries or property damage you cause to others in a car accident. 

You can add extra coverage to your non-owner car policy like medical payments and personal injury protection, uninsured or underinsured driver insurance, and rental car liability coverage. (Some travel rewards credit cards provide the latter.)  Some states require extra levels of coverage with non-owner car insurance, while others do not. 

But it doesn’t cover any damage to the vehicle, because you don’t own it. “It’s not yours. You’re either driving someone else’s car or a rented vehicle,” says Adams.

Who Offers Non-Owner Car Insurance?

Most major insurance companies, like GEICO, State Farm, and Nationwide, offer non-owner car insurance policies across the nation, but don’t advertise it. You’ll have to call insurance companies and/or independent insurance agencies over the phone to get quotes. Some companies can be picky about who they offer non-owner car insurance to; for example, Progressive only offers it to existing customers. 

How Much Does a Non-Owner Policy Cost?

Just like regular auto insurance, the cost of non-owner car insurance varies based on several different factors. 

With non-owner car insurance, the insurance company isn’t taking a vehicle into account to calculate your rate. Instead, they’ll analyze personal demographics, like your marital status, credit score, age, location and driving record, and estimate how likely you are to cause an accident. 

Generally, non-owner auto insurance costs less than what you’d pay for the same level of liability coverage on a car you own. Americans pay an average of $611.12 a year for liability insurance, according to the National Association of Insurance Commissioners.

“It definitely is cheaper than a standard auto insurance rate,” says Adams. That means non-owner car insurance could cost a few hundred dollars, somewhere between $200 and $500, per year. Also, this type of policy doesn’t come with a deductible.

When To Consider Non-Owner Car Insurance

Generally, you might want a non-owner car insurance policy in the following circumstances:

  • You’re looking to get your license reinstated after a serious infraction: If your license was suspended, you may need a non-owner SR-22 insurance or an FR-44 insurance, depending on the state, to earn back your driving privileges. Part of the process asks you to show proof of car insurance, but if you don’t own a vehicle at the time, you may need to get non-owner car insurance to fill the gap.
  • You rent cars or use car sharing services (like Zipcar or Car2Go) often: Non-owner car insurance will save you from buying the rental car company’s expensive liability insurance. Always ask the car rental company what level of coverage they offer, and if they don’t offer any, then it’s in your best interest to get a non-owner car insurance policy. There are some states, like California, that don’t require rental companies to provide liability protection. 
  • You borrow other people’s cars frequently: If you borrow someone’s car (and you’re not listed on their policy), expenses from an accident will generally be covered under the owner’s insurance policy. But if it’s a serious accident that exceeds the car owner’s level of coverage, you’re liable to cover the rest of the bill. Having a non-owner car policy would help pay for damages or injuries in that situation.
  • You want to avoid a lapse in auto coverage: If you’re in between cars, sometimes it makes more sense to stick with the same insurance company but downgrade to a non-owner car policy until you get your next car. When you do buy a car, you’ll want to let your insurer know and switch to a standard auto policy.