Non-Owner Car Insurance Policy is the perfect solution for drivers that don’t own their own vehicle.
One would think that in this day and age, most people will 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 as a subject on recently gained exposure in social media and general media outlets. But then again one has to wonder why he/she will buy insurance when they don’t own a car.
So, what brought about the need for non-owner car insurance? Well, to get the answer we have to look back at the introduction of car-sharing services into the market. It was the emergence of these service providers like Car2Go, ZipCar, and BMW’s ReachNow, that brought about the need for non-owner car insurance. This is not to say that car-sharing services are the only reason for buying non-owner car insurance. In fact, there are a whole lot of reasons why persons will 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 one on a regular basis.
The Working Principle of the Non-Owner Policy
The Non-owner policy quite similar to the standard auto policy in some ways. It protects drivers who don’t own the vehicles against certain liabilities like; damages to car, property and inflicting injuries on people.
Imagine, you are driving your friend’s car to the grocery store, and you cause an accident. With the non-owner insurance, you can cover for any damages you cause to others. The policy is strictly for liability, and that means it won’t cover any damage you incur on yourself or the car you are driving.
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 Insurance Policy Cover Or Not Cover?
- It protects just one person – the person that 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.
- It doesn’t cover towing and labor, rental reimbursement, or custom parts and equipment.
Who is the Non-Owner Insurance Policy for?
People who need Non-Owner Insurance Policy include:
- People who are require to submit SR-22 or FR-44 forms
Accident prone drivers, previously uninsured drivers who caused an accident, or drivers who are considered to be 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 a bit expensive for high-risk 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 enable individuals to borrow or “share” a vehicle to drive themselves. Frequent users of car-sharing services should strongly consider getting a non-owner insurance policy. Although it is common to find car-sharing services have 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 to drive for Uber or Lyft
Although these rental companies have a form of liability protection, it is never enough as they only cover certain parts of the trip or uses of the vehicle. With a non-owner policy, you can cover up the insurance divide, and protect yourself even more.
- People who rent cars regularly
A non-owner policy is perfectly ideal for folks who are in the habit of renting cars frequently for personal or business use. 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, then you will need to get yourself 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 cars without replacing it
A non-owner policy will help you prevent any 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 that non-owner policy is made for everyone, but on a second look at it, the policy is not appropriate for a car owner. The following are also people who won’t benefit much from a policy either, even if they are not car owners.
- People who rarely rent or “share” a car
Rather than get a non-owner policy, you should consider utilizing;
- The protection offered by the owner’s car insurance
- Protection tied to your credit card
- The protection provided by the insurance of the car-sharing service or rental company.
- People who use a roommate’s car often
The non-owner policy doesn’t protect you against liability if the car you use is that of someone you live with such as your 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 in his/her auto policy and cover the cost of having you on the policy.
- People who still live with their parents and use their car
If you are in such a scenario, it is better you ask the car owner (your parents) to add you as an additional driver in their auto policy. Depending on your age, the cost of adding you to the policy could be better than a separate non-owner policy for yourself.
- 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 will need to obtain a commercial non-owner policy to cover for liability.
Types of Non-Owner Car Insurance
There are different types of Non-Owner Car Insurance that exist namely:
- Personal; This is for drivers who frequently borrow cars but don’t own one.
- Rental: This 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. A commercial non-owner policy is suitable for this scenario as a personal insurance policy won’t work.
- 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 cause of an accident.