What is Non Owner Car Insurance
As the name suggests, the Non-Owner Car Insurance is a policy tailored for individuals who drive, but they don’t actually own a car. It is a very affordable cover compared to purchasing the standard auto policy. Non-owner auto insurance covers can be up to 15% cheaper than the traditional car insurance policies.
But, just because non-owner car insurance covers are cheaper doesn’t mean that they are best for everyone. These policies are best suited for a particular group of people only.
Non-Owner Car Insurance Overview
The non-owner car insurance protects a driver from both property damage and bodily injury when they’re driving a vehicle that they don’t own. Basically, the policy will protect you from lawsuits when you find yourself in an at-fault accident. This makes the cover a decent option for people who tend to borrow or rent a car more often. It’s also a useful policy to have if you are filing for an SR-22.
Other than providing liability coverage, some non-owner car insurance may go as far as offering:
Uninsured or Underinsured Motorist Liability Cover – This policy will pay you when you are injured in an accident involving another driver who is either underinsured or uninsured. Hit-and-run accidents are also covered under this policy.
Medical Payments – This coverage will pay for all medical expenses for both you and the other passengers in your vehicle regardless of who is at fault for the accident.
Finally, the non-owner auto insurance may also include a rental car liability cover.
Since there is no particular car assigned to the non-owner car insurance holder, the policy does not provide physical damage coverage which is also referred to as the comprehensive and collision coverage. This means that the cover will not pay for any damages done to the car after a collision.
Why would you want a Non-Owner Car Insurance?
The non-owner car insurance is not mandatory, but the cover can be instrumental under certain circumstances. The following are some of the reasons why you may need non-owner auto insurance:
If you rent cars regularly
The non-owner car insurance is a cheaper option than purchasing rental car insurance. Rental car policies usually cost $20 per day at a minimum. Therefore, if you rent cars regularly, it means that you will have to purchase more rental car policies and this will become very costly. Non-Owners auto insurance is less expensive.
However, you need to read the details on the policy to confirm that the policy offers protection against liability when driving a rental car. You’ll also need to verify whether any damages present on the rental car are protected by the rental car insurance that’s provided as a free perk by most credit cards. If they are covered, you won’t need any additional protection, but if they are not, you will need to buy a collision-damage waiver. You should also know that credit card’s rental car insurance will only protect the rental car from damage, but it’ll leave you exposed to lawsuits.
In summary, combining non-owner car insurance with a credit card’s rental insurance offers comprehensive coverage for people who rent cars regularly.
If you borrow cars regularly
People who borrow cars regularly should also consider getting the non-owner car insurance. This will ensure that you are always covered especially when the owner’s insurance policy has a low limit.
The rules on non-owner auto insurance are quite complicated when it comes to the borrowing of cars. For instance, some insurers may refuse to pay you if you are borrowing a particular car very frequently. In some cases, you ‘ll have to be listed in the car owner’s insurance cover if the two of you live together or if you tend to borrow that car regularly. This will ensure that the primary coverage protects you as well. You must know that after getting listed, any accidents that you may cause will result in an increase in the owner’s policy premiums.
Make sure that you read the fine print on the conditions below the non-owner policy if you borrow a specific car consistently. You should even consider speaking to an agent about this subject to understand how the particular policy works in such instances.
If you are applying for an SR-22 Insurance
SR-22 Insurance may become necessary when you need your license reinstated after a DUI or serious traffic violations. You cannot file for an SR-22 yourself, but instead, you will need your insurer to do it for you.
Non-owner SR22 insurance is beneficial if you don’t own a car. The insurer will file the SR-22 on your behalf. Other than that, the policy will also remain affordable even though they will charge you slightly higher premiums. That’s simply because the need for SR-22 insurance paints you as a high-risk driver.
If you are looking for a non-owners SR22 Insurance, it’s essential to ensure that the company you are getting the non-owner policy from sponsors SR22 covers. Some companies are known to provide the non-owner policy, but they don’t file for both SR-22 and FR-44.
If you won’t be driving for an extended period
Individuals who had auto insurance covers at a certain point followed by a long period without any policy in place are usually considered as high risk insures. Most Insurance companies will hence charge them high premiums the next time they are buying auto insurance. To avoid all that, you can buy the inexpensive non-owner policy which ensures that there is no lapse in coverage.
Some companies are known to offer discounts for people who’ll be overseas for extended periods. Therefore, if the reason why you’ll be uncovered for some time is because you are traveling abroad, you can check your eligibility for these discounts as you may not need a non-owner policy at all.
When should you not buy non-owner auto insurance?
Non-owner auto insurance covers are pointless if:
- You borrow the vehicle of a person you live with
- You are a car owner
- You are driving a company car
Factors that Determine the cost of Non-Owner Car Insurance
Usually, we’d give you a comparison on the premium rates of different companies offering a particular insurance policy, but that’s quite challenging in this situation. Why? Well, all major auto insurers do not provide insurance quotes online. Instead, you have to call each one of them individually to get a quote. These quotes are known to vary from one person to another depending on the following factors:
- The place you live
- Your driving history
- Your coverage limits
- How often you will be driving
All auto insurance companies will use this information to generate the premium rates applicable to you. Different companies have different formulas though, and hence the premiums will also vary from one insurer to the next. It’s best that you get quotations from several companies and compare them before making your final decision.
From our research, some of the companies that offer the best non-owner auto insurance are GEICO, State Farm, The General, Progressive, and Nationwide. You can shop around between the five or search for more and see which one of them will offer the best cover for your unique case.
Non-owner car insurance may not be mandatory, but it is very useful to have especially if you don’t own a car, but you tend to rent or borrow cars regularly. It’ll ensure that you are always covered against liabilities should an accident occur.
When shopping for this policy, make sure that you do more than just comparing the premium rates. Go through the coverage provided under each policy to ensure that you get the best value for your money. Also, don’t forget to mention to your insurer that you need the policy because you want an SR-22 if that’s the case.
David is a financial expert who graduated from the University of Fordham (Master in Finance) in 2001. He has 10+ years of experience in private equity and wealth management. With strong expertise in senior-level financial planning, personal financial analysis, and mortgages, David knows his way around personal finance. Before working at CCR he used to be a financial analyst at McKinsey.
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