Even if you don’t own a car, you may need vehicle insurance if you rent or borrow your car on a regular basis. Car owners may have liability coverage, but that insurance may not cover all the costs of a serious accident. If you get into an accident while driving someone else’s car and you are at fault, you could end up paying expensive car repairs and medical bills.
Non-owner auto insurance provides valuable financial protection for drivers who borrow or borrow a vehicle, who take the vehicle for short periods of time, or who are required by SR-22 requirements.
How does non-owner auto insurance work?
Unlike standard auto insurance, which covers a specific vehicle, non-owner insurance covers a specific individual. This provides secondary coverage, which covers some or all of the remaining costs not covered by the car owner’s insurance if you are involved in an accident while driving the car owner’s car.
“Most consumers buy auto insurance because they own and drive a car,” says Nick Schrader, owner of Texas-based Second Western Insurance. “However, some people choose to take out non-owner auto insurance to protect their liability for the occasional car accident. This insurance is useful when you borrow or borrow a vehicle that is not owned by the operator. You will be compensated.”
Let’s say you borrowed a friend’s car and got into an accident where you were at fault. Your friend’s auto insurance may cover damage to the other driver’s car, up to the insurance limits. If the cost of the damage exceeds the owner’s insurance limit, the non-owner’s insurance will cover the remaining costs.
For example, if your accident causes $25,000 in property damage, but your friend only has $20,000 in property damage liability coverage, your non-owner policy will pay the remaining $5,000.
What does non-owner auto insurance cover?
Alaina Hickson, director of sales and operations at Tennessee-based Churchill Agency, said non-owner auto insurance typically covers personal injury and property damage if you are at fault in an accident. It is said to cover compensation.
- Personal injury liability: If you are at fault for an accident, we will pay for the medical expenses of the other driver and his or her passengers.
- Property damage liability: It can help pay for repairs or replacements to the other driver’s car or someone else’s property (like a fence or mailbox) if you’re involved in a collision.
- Payment of medical expenses (sometimes optional): Pays for medical expenses for you and your passengers.
- Personal injury protection (sometimes optional): Required in most no-fault states, it can help pay for you and your passengers’ medical bills, funeral expenses, and lost wages.
- Uninsured or Underinsured Motorist Coverage (optional in some cases): We pay if the at-fault driver doesn’t have insurance or doesn’t have enough insurance to cover your financial liability.
A non-owner policy provides the same liability protection as driving a rental car. Insurance provided by car rental companies is usually expensive, so frequent renters may be able to save money by purchasing non-owner car insurance and denying coverage at the rental he counter. .
What is not covered by non-owner auto insurance?
Generally, collisions and comprehensive damage are not covered by non-owner insurance, Schroeder said.
Collision coverage pays for repairs to the car you were driving at the time of the accident. Comprehensive coverage for non-collision costs such as fire, theft, and damage from tree limbs falling on your car during a storm.
Therefore, if the car you are driving is damaged in a traffic accident or stolen while you own it, non-owner insurance will not cover the loss. However, if the vehicle owner has collision insurance, the damage must be covered up to the insurance limit. Similarly, if you have comprehensive insurance, it should help pay for the replacement cost of your stolen vehicle.
Unless your non-owner policy includes medical payments or PIP coverage, it won’t cover injuries sustained by you or your passengers. Similarly, damaged or stolen personal property is not covered.
How much does non-owner car insurance cost?
The cost of non-owner auto insurance can vary widely, from a few hundred dollars a year to nearly $800 a year, according to Schroeder, noted Insurance Business Magazine.
However, prices vary depending on personal factors such as:
- your age
- your place
- your driving history
- Insurance coverage limitations
- Your insurance deductible (if any)
Who needs non-owner auto insurance?
It makes economic sense to purchase non-owner auto insurance if:
- Relying on someone else’s car: “Non-owner auto insurance is recommended for people who don’t own their own car or who have standard auto insurance but often rent a car from someone else,” says Hixson . This includes occasionally borrowing a car from a family member, such as a roommate. If you regularly drive your family’s car, list you on their auto insurance policy to make sure their liability coverage covers you, and if your insurance company is not rated as a regular driver. You need to make sure that your insurance claim will not be denied.
- Rent a car frequently: A non-owner’s policy can help you avoid the high cost of liability coverage offered by rental car companies.
- You must file an SR-22 (FR-44 in Florida or Virginia). After being convicted of a serious offense such as a DUI, a court may rule that you must submit a proof of insurance called an SR-22 or FR-44.
- If you temporarily don’t have a car but plan to buy one: Non-owner insurance can provide temporary auto insurance and allow you to maintain ongoing coverage to avoid lapses in your insurance history. This can lead to higher premiums when you take out another personal car insurance policy.
- Obtain a vehicle through a ride-sharing service. Ridesharing vehicles may include some level of liability coverage, but non-owner insurance can provide additional financial protection.
Situations where non-owner auto insurance is essential
If you can’t afford to buy a car, but plan on buying one in the future, non-owner insurance can help you avoid gaps in coverage. Many insurance companies allow you to convert non-owner insurance to standard auto insurance when you drive a new car.
If you don’t plan on buying a car and use someone else’s car when you need to drive somewhere, non-owner’s insurance may be a good option for you.
Your job may require you to frequently drive other people’s cars. For example, let’s say you’re a professional caregiver who transports clients to medical appointments in a disability van, but you don’t know what their auto insurance covers. In these cases, non-owner insurance that covers your business activities can provide some peace of mind (not all insurance companies offer business coverage with non-owner insurance).
Who should not have non-owner auto insurance?
People who live with their parents or other family members and rely on their car for transportation may not need non-owner coverage. Your household must list everyone who lives in the household and drives a vehicle under their insurance.
Motorists who don’t own a car and never drive it don’t need non-owner auto insurance.
Also, drivers who own a car, have standard auto insurance, and rarely rent a car don’t need non-owner coverage.
Non-owned car insurance for businesses
Employers should purchase non-owner auto insurance to extend liability coverage to employees who may drive personal vehicles for company business.
Some providers that sell small business insurance also offer employment and non-owned auto coverage (HNOA). This typically comes as an endorsement to general liability insurance, commercial auto insurance, or business owners insurance (BOP). HNOA coverage provides personal injury and property damage liability coverage for company-rented, company-leased, or company-borrowed vehicles driven by employees, including employees’ personal vehicles used for occasional errands. .
Employees who use personal cars for business must carry their own standard auto insurance policy, but use of the car for business purposes may be excluded. HNOA can provide the liability coverage needed for both employers and employees. Also, some insurance companies require businesses to provide equal liability coverage for commercial motor vehicle and his HNOA exposures.
HNOA policies generally do not apply to employee personal property such as briefcases, cell phones, and laptops. The HNOA may also exclude personal injury coverage for employees, their families, or other non-employees who are occupants of covered motor vehicles.
Frequently asked questions (FAQ)
it depends. Traffic tickets typically stay on your record for at least three years. Depending on the number and severity of violations, your provider may deny coverage or charge higher premiums. When purchasing non-owner insurance, request quotes from multiple insurance companies.
“If you don’t own a car and rent frequently, non-owner insurance may be a good option,” Hixson says. “As with any type of price shopping, it’s important to compare the price and coverage offered by the rental car company to the cost of non-owner auto insurance.”
No, the non-owner policy only applies if you are in the United States.
“These policies only expand liability within the United States and do not apply to international travel,” Schroeder said.
If you need car insurance when going abroad, you should check the laws of your destination, as insurance requirements vary by country.
Yes, non-owner insurance can cover the medical costs of the other driver and their passengers under personal injury liability insurance if you are at fault in the accident. However, your non-owner policy must include medical payments or personal injury protection (PIP) coverage to cover medical expenses for you or your passengers.
Yes, according to Mr. Schroeder. Before purchasing non-owner auto insurance, check whether the policy you plan to purchase will allow you to convert to standard insurance if you purchase the vehicle.