Don't Own A Car But Still Drive? Car Insurance Information You Need To Know

A Non-Owner Car Insurance Policy is the perfect solution for drivers who don’t own (whether financing or leasing) their own vehicle but still drive.

One would think, in this day and age, most people would be familiar with non-owner car insurance, but that isn’t the case as very few people are familiar with it. Non-owner car insurance is a subject of recently gained exposure because of social media and general media outlets. 

So, what brought about the need and interest for non-owner car insurance? Well, to get the answer, we have to look at the introduction of car-sharing services into the market. It was the emergence of service providers, like Car2Go, ZipCar, Turo, and BMW’s ReachNow. This is not to say car-sharing services are the only reason for buying non-owner car insurance. In fact, there are several reasons people may want to acquire it for themselves.

Essentially, non-owner car insurance is ideal for folks who don’t have a personal car but occasionally borrow, lease, or share a vehicile regularly.

The Working Principle of the Non-Owner Car Insurance Policy

A non-owner policy is quite similar to a standard auto policy in some ways. It protects drivers who don’t own the vehicle against certain liabilities like damages to the other car, property, or injuries to other people.

You can typically get a non-owner’s car insurance policy from most insurance companies that sell car insurance. The cost of a non-owner’s car insurance policy is similar to that of auto liability coverage.

What Exactly Does The Non-Owner Car Insurance Policy Cover Or Not Cover?

  • It protects just one person – the person who buys the policy.
  • Damages to other cars and people – but not the policy owner or their vehicle. It does not cover other collision or comprehensive damages like regular car insurance policies can.
  • It doesn’t cover towing and labor, rental reimbursement, or custom parts and equipment.

Who is the Non-Owner Car Insurance Policy for?

People who may be interested in a Non-Owner Insurance Policy include:

  • People who are required to submit SR-22 or FR-44 forms

Accident prone drivers, previously uninsured drivers who caused an accident, or drivers who are considered high risk (like repeat DUIs or repeat speeding tickets) can be legally required to file either an SR-22 or FR-44 depending on the state, which shows that they possess the necessary liability coverage. Getting standard insurance coverage can be expensive for these drivers. However, a non-owner policy is a pocket-friendly way to get liability coverage and still fulfill this requirement.

  • People who use car sharing services

Not to be confused with the popular ride sharing services such as Uber or Lyft in which an insured driver gives you a ride (like a taxi), car-sharing services (like those mentioned at the top of this article) enable individuals to borrow or “share” a vehicle to drive themselves, similar to that of a rental car company. Frequent users of car-sharing services should strongly consider a non-owner insurance policy. Although it is common to find car-sharing services with their own liability coverage, don’t rely solely on it. Get your own non-owner policy to ensure you have adequate coverage.

  • People who rent cars regularly

A non-owner policy is perfectly ideal for folks who are in the habit of renting cars frequently. A non-owner policy provides protection if there is an accident, and it is pocket-friendly too.

  • People whose insurance will soon lapse

One thing is true about insurance companies—they don’t like to see lapses in coverage. People who allow their coverage to lapse risk certain penance such as fines, fees, and can be earmarked as a high-risk driver. A non-owner policy can help you avoid all of this without breaking the piggy-bank. 

  • People who need to reinstate a suspended license

Reinstating a suspended license requires proof of insurance. A non-owner policy gives you an affordable outlet to meet that requirement.

  • People who borrow cars frequently

If you are part of the league of people who borrow cars from friends or relatives they don't live with, then you should consider a non-owner policy. Even if the owner of the car has insurance, a terrible accident can exceed the insurance limit. In such scenarios, non-owner insurance coverage becomes handy.

  • People who sell their car

A non-owner policy can help you prevent a lapse in coverage if you sold your car and haven’t bought a new one. It can also be a handy option to have when you are test driving new cars.

Who Should Avoid Non-Owner Car Insurance Policy?

Going from the above list, it would seem a non-owner policy is made for everyone, but the policy is not appropriate for all drivers. The following are people who are less likely to benefit from a non-owner policy.

People who rarely rent or “share” a car.

Rather than getting a non-owner policy, you should consider utilizing:

  • Protection tied to your credit card.
  • The protection provided by the car-sharing service or rental company.

People who use a car belonging to someone they live with.

A non-owner policy doesn’t protect against liability if the car you use belongs to someone you live with, such as your spouse, roommate, friend, or relative. If you are in such a scenario, it is better you ask the car owner to add you as an additional driver to his/her auto policy.

People who borrow a car for a long period.

Non-owner car insurance doesn’t cover you if you borrow a single car for a long time.

People who need to loan a car for business needs.

In such a scenario, you should obtain a commercial policy to cover against liability.

Types of Non-Owner Car Insurance

There are different Non-Owner Car Insurance Policies that exist:

  • Personal: This is for individual drivers who frequently borrow cars but don’t own one.
  • Rental: This is tailored for drivers who frequently rent cars. These policies are pocket-friendly and they provide a cheaper option than paying for liability via the rental company.
  • Commercial: For people who rent vehicles for business and commercial needs. 
  • Employer: For people who drive personal vehicles for business needs. An employer can purchase an employer non-owner liability policy to protect you and your employer in the event of an accident.

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