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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.
Why trust us in finding the best car insurance?
We at The Simple Dollar are not just finance and insurance experts. We are also consumers who want the best value for our money and strive to help you with the same. Whether you are purchasing insurance for the first time or switching providers, our goal is to assist you in choosing the company that meets your requirements.
Our classification and ranking of the best non-owner car insurance providers are based on extensive research about the company’s cost-effectiveness and customer service. To bring you the most accurate and reliable information, we evaluate experts from renowned third-party market research companies such as J.D. Power and Better Business Bureau. Founded in 1968, J.D. power is an esteemed data analytics company known for its automotive research across the country, while Better Business Bureau, established in 1912, is the leading authority on market research and evaluating a business’ trustworthiness. Our resources on choosing the best car insurance are developed after assessing hundreds of thousands of quotes, surveying consumers and locating official complaints submitted to the National Association of Insurance Commissioners.
The 6 best non-owner car insurance providers of 2021
- Best for Low-Cost Coverage: Geico
- Best Customer Service Agents: State Farm
- Best for Poor Credit: Nationwide
- Best for Safe Drivers: Farmers
- Best for Discounts: Allstate
- Best Online Resources: Progressive
Compare non-owner car insurance carriers
|Provider||Average price||Monthly Cost||Discounts*||SimpleScore|
|Geico||$311||$25.92||Multi-policy, good driver, defensive driving, driver’s education course, good student, military, federal employee||4.2/5|
|State Farm||$410||$34.16||Multi-policy, accident-free, defensive driving, good driving, driver training, good student||4.6/5|
|Nationwide||$677||$43.42||Multi-policy, safe driver, autopay, affinity member, accident free, good student, defensive driving||4.2/5|
|Farmers||$521||$48||Multi-policy, autopay, good student, 55 and older, claim free, driver training, good driver||4.2/5|
|Allstate||$638||$53.17||Multi-policy, smart student, autopay, responsible payer, safe driving, early signing, paperless||4.2/5|
|Progressive||$576||$56.72||Multi-policy, continuous insurance, good student, homeowner, online quote, sign online, paperless, autopay, safe driving||4.5/5|
*Some discounts may only apply to full auto coverage and vary by state. Data accurate as of November 24, 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.
[ Next: How Much Car Insurance Do You Need? ]
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.
Check your state requirements
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.
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.
What is an SR-22?
Some states require a certificate of financial responsibility after a serious driving conviction, such as an alcohol violation, driving without insurance or when involved in an auto accident. This certification is called an SR-22, and it is necessary for having your driving privileges reinstated. An SR-22 form can only be purchased from a car insurance company and cannot be obtained without auto insurance. To file an SR-22, you should either have car insurance or purchase one prior to filing for the certification.
If you already have car insurance but your current provider does not offer SR-22 insurance, getting non-owner car insurance with a different provider is often a smart move. In this case, your primary insurer handles all your liabilities while the SR-22 with the second provider gets you back on the road.
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.)
What are the benefits of non-owner car insurance?
Auto insurance is typically for the vehicle and not the driver. If you do not own a car but often find yourself in the driver’s seat, you remain unprotected even if you drive an insured vehicle. The best non-owner car insurance allows you to use any car and remain insured against unforeseeable events. The major benefits of non-owner car insurance are:
- Affordability: This type of policy is far cheaper than traditional auto insurance because there is less time spent driving.
- Convenience: The perks of auto insurance without the hassle of owning a car. That’s the best of both worlds.
- Rental coverage: If you often rent a car, a non-owner’s policy eliminates the need to get separate rental coverage and you remain insured regardless of whose car you drive.
Better auto-insurance premiums: When you do buy a car and require auto insurance, the non-owner’s policy will put you in the good books of the insurer and might help you get discounted rates.
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 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.
[ See: What Is Uninsured Motorist Coverage? ]
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
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.
How to get cheap auto insurance?
Although a non-owner’s policy is inexpensive, there are steps you can take to get additional discounts and save more money. When purchasing a policy, it helps to shop around and compare quotes to find what fits you best. Since none of the major providers listed above offer quotes online, you need to contact the companies to get more information.
Being a responsible driver, having a clean record, and keeping a close eye for discounts are some of the ways to get cheaper non-owner car insurance.
Auto insurance discounts
Traditional auto insurance often comes with perks if you fulfil certain criteria and the same goes for non-owner car insurance. The following are some of the discounts you might be eligible for when purchasing the best non-owner car insurance.
- Multi-policy: When you combine two or more insurance policies from the same insurer, you become eligible for attractive discounts.
- Homeowner: If you own your house, it makes you appear responsible in the eyes of the insurer, leading to certain rebates.
- Driver’s education course: Completing a driver’s education course gives you additional credibility, and some providers may reward you discounts and price cuts.
- Good student: Being a brilliant student at an esteemed institution can lead to student discounts for young drivers.
- Military or federal employee: If you or an immediate family member is part of the government services or armed forces, you might be eligible for reduced rates. This is called affinity discount.
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.