Do you need car insurance if you don’t own a car?
If you drive a borrowed or rented vehicle, then the answer is likely yes.
If you’re driving a car you don’t own, then there’s what’s called a “liability gap.” To cover this gap, drivers can take out non-owner car insurance or a type of policy that provides liability coverage should you have an accident while driving a car you don’t own. Essentially, non-owner auto insurance offers backup coverage to further support the car owner’s insurance policy.
If the owner’s liability limit is reached, a non-owner car policy can kick in and pay for damages.
In this short guide, we’ll cover the basics of non-owner insurance, its benefits, and the way to find the right policy for your needs.
Non-Owner Car Insurance 101
What is non-owner car insurance and what does it cover?
Non-owner insurance exists primarily to give you liability protection if another party suffers bodily injury or property damage in an accident.
However, it doesn’t typically cover your (first-party) damages. To that end, consider the below:
- Non-owner auto insurance does not provide comprehensive or collision coverage. This means it will not pay for damage to the car you were driving.
- It also will not cover your medical expenses if the accident was your fault.
However, it can still create a safeguard for the financial consequences of an accident.
For instance, the liability coverage will help pay for property damage and medical bills for the other party involved in the accident should the car owner’s policy omit responsibility.
Without insurance, you’d be responsible for paying those costs out of pocket.
Who Needs Non-Owner Car Insurance?
There are several situations where you may need non-owner car insurance. If you do any of the below, it’s paramount you ensure an adequate policy is in place:
- Borrow cars – You don’t own a car but frequently borrow one from a friend or family member you don’t live with.
- Drive a car for work – You drive a car that belongs to your employer. Your company should provide you with coverage, but a non-owner policy can give you additional protection if the company’s insurance is not sufficient.
- Rent regularly – You often use a rental car and the cost of their liability insurance is more than you would pay for a non-owner policy.
- Are car shopping – You’re on the hunt for a new car and don’t want to risk a higher premium on your new car’s insurance because you had a lapse in insurance coverage.
- Use car-share services – Car share services such as Zipcar provide liability insurance, but you want to make sure it’s sufficient enough to protect you in the event of an accident. If not, a non-owner policy might be able to cover the gaps.
SR-22s and Non-Owner Car Insurance
You may also want to consider non-owner car insurance after you’ve had your driver’s license revoked by a court for a serious or criminal traffic violation.
But why would you take out auto insurance if you’re not allowed to drive?
Depending on the penalty, you may be required to file form SR-22 demonstrating proof of insurance before you can begin the process of reinstating your driver’s license.
A non-owner car insurance policy is often the most cost-effective way to fulfill this requirement.
Situations When You Don’t Need Non-Owner Insurance
There are some situations where you don’t need a non-owner auto insurance policy, even while driving someone else’s car. The most common is when you’re frequently driving the car of someone who lives with you.
Instead of paying for non-owner insurance in this situation, you should be added as an additional user on the car owner’s insurance policy.
You may also find that the coverage offered by rental or car-share services is enough to meet your needs. Just be very careful to read all of the necessary information about these policies and consult a car insurance company agent if you have any questions or concerns.
Cost of Non-Owner Car Insurance
Many insurance companies offer non-owner car insurance.
How much is non-owner car insurance? This policy is much less expensive than other types of coverage since it only covers liability (not the car you’re driving or your bodily injury). Likewise, a non-owner’s policy won’t usually have a deductible.
When it comes to the total cost, the average price of a non-owner policy is $474 annually.
Factors That Influence the Cost of a Non-Owner Policy
As with any insurance policy, some factors will influence the cost of non-owner insurance. They include but are not limited to:
- Where you live – Insurance costs are higher in urban areas than in rural places. Certain states also have higher costs for auto coverage.
- Your driving record – If you have a good driving record, your policy will cost less than it would for someone with traffic violations, a DUI, or recent accidents.
- The amount of coverage you select – The more coverage you have, the more it will cost.
- Your demographics – Your age and gender influence the cost of your insurance policy. Younger people and men pay more because they present a greater statistical risk.
Find Your Perfect Non-Owner Policy at OnlineAutoInsurance
A non-owner car insurance policy is a liability policy that can protect you financially in the event of an accident. Whether you’re looking for a comprehensive family policy that you can add your kids to or a non-owners policy while you’re between cars, affordability is key.
At OnlineAutoInsurance, we take the hassle out of researching insurers and comparing different quotes. Just enter your ZIP code, a few details about your driving history and current vehicle (if any), and we’ll do the rest.
With OAI, it’s easy to find the policy that provides you protection and peace of mind. And if you need non-owner car insurance, we’ve got you covered. We’ll help you identify the policy that works for you.
Business Insider. Non-owner Car Insurance. https://www.businessinsider.com/personal-finance/non-owner-car-insurance
Insurance Information Institute. What Determines the Price of an Auto Insurance Policy? https://www.iii.org/article/what-determines-price-my-auto-insurance-policy