Non-Owner Car Insurance: What Is It And Who Needs It?
During the COVID-19 outbreak, many non-owner car insurance companies are offering payment relief, online claims processing, and have halted insurance cancellations. They have also provided partial premium refunds because many people have reduced their driving and are staying home and working from home.
The 6 best non-owner car insurance providers of 2020
- Geico: Best for low-cost coverage
- State Farm: Best customer service agents
- Nationwide: Best for poor credit
- Farmers: Best for safe drivers
- Allstate: Best for discounts
- Progressive: Best online resources
Compare non-owner car insurance carriers
|Lender||Average price||Discounts*||Customer satisfaction**|
|Geico||$311||Multi-policy, good driver, defensive driving, driver’s education course, good student, military, federal employee||3/5|
|State Farm||$410||Multi-policy, accident-free, defensive driving, good driving, driver training, good student||3/5|
|Nationwide||$677||Multi-policy, safe driver, autopay, affinity member, accident free, good student, defensive driving||3/5|
|Farmers||$521||Multi-policy, autopay, good student, 55 and older, claim free, driver training, good driver||3/5|
|Allstate||$638||Multi-policy, smart student, autopay, responsible payer, safe driving, early signing, paperless||3/5|
|Progressive||$576||Multi-policy, continuous insurance, good student, homeowner, online quote, sign online, paperless, autopay, safe driving||3/5|
*Some discounts may only apply to full auto coverage and vary by state. Data accurate as of June 23, 2020.
What is non-owner car insurance?
Non-owner car insurance is for drivers who don’t own a car. It supplements the car insurance already on the vehicle (provided by the owner) and acts as extra coverage in case of a crash or other automotive accident.
A non-owner car insurance policy, sometimes also called non-drivers insurance or liability coverage, usually only provides minimum coverage. There’s typically no deductible when you make a claim.
These policies include:
- Bodily injury: coverage if someone else gets hurt in an accident you cause
- Property damage liability: coverage if you damage someone else’s car or property
When you are involved in a car accident, there are several scenarios in which your non-owners car insurance applies:
- If you borrow someone’s car and are involved in an accident, the vehicle owner’s car insurance pays out first. If it’s not enough to cover damages, your non-owner policy will kick in as secondary coverage.
- If you cause an accident and the other person is injured, the bodily injury liability portion of your insurance will help cover their medical expenses, lost wages and some of your legal fees.
- The property damage portion helps you pay for the damage to someone’s vehicle or property if you were at fault for the accident.
- Some insurers also offer medical payments coverage, uninsured/underinsured motorist bodily injury coverage and/or rental reimbursement as part of a non-owners policy.
Understanding non-owner car insurance
How does non-owner car insurance work?
You buy non-owner insurance just like you would a standard auto insurance policy:
- Get in touch with an insurer.
- Get a quote.
- Sign up for coverage and then pay your premiums to keep the policy in place.
Non-owner car insurance applies to you, specifically. It doesn’t travel with the car for which you bought the policy, nor does it extend to any other members of your household.
Your state’s Insurance Commission sets the requirements for minimum automobile insurance. Most states require some type of insurance. Even so, non-owner car insurance is not required in all states. For example, New Hampshire and Virginia do not require certain types of auto insurance. If you must maintain insurance because of a DUI record or your state requires liability insurance, then a non-owner insurance policy will meet this requirement. That way, your premium costs less than a standard policy but still meets the minimum for liability insurance.
Meeting legal requirements
If you live in a state that requires everyone with a license to carry liability insurance, or if you must maintain coverage as the result of a DUI record, then a non-owner policy is an affordable way to meet this legal requirement. Since you don’t own a vehicle, you pose a low risk to the insurance company. As a result, your premium costs less than it would for a traditional policy but still meets the state’s mandatory minimum for liability insurance.
Who needs non-owner car insurance?
Technically, you’re not legally obligated to have car insurance (including non-owner) if you don’t have a car. If you frequently find yourself driving anyways, it’s probably a good idea.
Non-owner car insurance is beneficial for individuals who drive vehicles they don’t own. If you’re borrowing a car, a non-owners insurance policy will pay for injuries and damage in the case of an accident. If you drive a car for work, borrow a car regularly or are mandated by the courts, you may want to carry the extra coverage.
Here are some scenarios where it might make sense to have non-owners car insurance:
- You rent cars regularly: A non-owner policy that offers liability coverage on rental vehicles can be a cost-effective option for people who frequently rent cars. Read the fine print on your non-owner policy if you intend to use it for rental cars, and make sure it covers you when you’re driving one.
- You borrow cars regularly: If you’re a caregiver or work with someone whose vehicle you often use, consider having non-owner insurance to supplement their personal policy if you get in an accident. If you’re borrowing a car from someone in your household, you should be listed on their policy –– not on a non-owner policy.
- You use a car-sharing service: If you’re enrolled in a car-sharing service like Car2Go, Zipcar or Maven, you’ll typically get some liability and damage coverage as part of your membership. But check the fine print to find out how much protection you have. In some cases, it might be wise to get some additional coverage.
- You’re without a car temporarily: If you’re selling your car but plan to buy a new one soon, it’s usually a good idea to get non-owners insurance to prevent a lapse in insurance coverage. Otherwise, you may end up paying a higher rate for regular insurance when you get a new car.
- You’re required by a court: If you’ve committed serious traffic violations, a court may require you to file a proof-of-insurance certificate to maintain your driver’s license, even if you don’t own a car. Specifically, this can happen if you’ve been convicted of a DUI, caused an accident as an uninsured driver or been ticketed for reckless driving. If this happens, you may need non-owner SR-22 insurance (or FR-22 insurance if you live in Florida and Virginia).
Non-owners car insurance probably doesn’t make sense if you own a car, don’t rent cars very often or the car you drive has sufficient insurance (whether via a friend, family member or company.)
The cost of non-owner coverage
The average cost of a non-owners policy is $474. This rate is much lower than the average cost of a standard car insurance policy. Non-owners insurance will also count as continuous coverage, so you won’t be penalized with a higher premium if you decide to get your own vehicle again.
We received quotes over the phone from the top insurers and broke them down to determine some average rates.
It’s important to note that coverage limits vary by state and policy. Also, non-owner car insurance does not cover damages to any vehicle.
Average cost of non-owner car insurance
|Annual cost||Monthly cost|
What impacts the cost of non-owners insurance?
Costs for non-owners car insurance can vary from one provider to the next and from state-to-state. This might be because of repair costs and medical costs that vary by state, commuting distances and at-fault and no-fault liability insurance costs, among other reasons.
A couple of factors come into play when determining costs, including:
- Driving history: Drivers who avoid tickets and accidents usually qualify for cheaper non-owner car insurance.
- Age: Younger drivers generally pay more for auto insurance because of their lack of driving experience.
- Gender: Although gender once paid a role in insurance costs, that is not so much the case today. However, women may qualify for lower rates in some areas.
- Credit score and history: Lenders want to know you’ll pay your premiums. A higher credit rating and long positive payment history will likely qualify you for a lower rate.
- Location: State’s vary on policy limits and costs for non-owner car insurance. State’s with a higher incidence of accidents may charge higher rates.
- The amount of coverage: Generally, the higher the limits are on your policy, the more you can expect to pay for non-owner car insurance.
What does non-owner car insurance cover?
Non-owner car insurance only covers the person insured, and no other drivers can be listed on the policy. In most states, non-owner auto insurance covers the following:
- Medical payments: Insurance coverage for medical expenses for passengers and your injuries in an accident, no matter who is at fault.
- Property damage liability: If you or another driver is in an at-fault accident, this insurance covers to replace or repair the other driver’s property or vehicle.
- Bodily injury: This liability insurance pays for medical expenses if you are liable in an at-fault accident.
- Uninsured motorist liability: In case of a hit-and-run or if an underinsured or uninsured motorist causes you to be injured, you will be covered if you are injured in an accident.
What does non-owner car insurance not cover?
What this coverage includes depends on which company you get insurance from. Non-owner car insurance typically does not cover:
- Collision insurance
- Comprehensive insurance
- Towing insurance
- Rental reimbursement
We welcome your feedback on this article and would love to hear about your experience with the non-owner car insurers we recommend. Contact us at firstname.lastname@example.org with comments or questions.