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What is Non-Owner Insurance?

For those folks that do not own a car, car insurance companies offer a liability policy known as “non-owner” car insurance.  If you often borrow or rent a vehicle, or need to file an SR-22 while not owning a vehicle, the non-owner car insurance policy is one of the most affordable options when needing to purchase coverage for car insurance liability.

Generally, the rates for non-owner auto insurance are 5-15% cheaper than the rates for a standard policy.  Unfortunately, non-owner auto insurance is not right for everyone, such as those that are required to be insured on a vehicle’s primary policy, or those that live with the automobile owner. Let’s find out what non-owner car insurance is and which car insurance companies provide this.


Vehicle Owners and Non-Owners in the U.S.


The amount of licensed drivers on U.S. roads has drastically increased from 163 million in 1988 to more than 210 million in 2010, according to the U.S. Office of Highway Information Policy.  Furthermore, the U.S. Department of Transportation reports that about 8% of those licensed drivers do not own a car.

Further demographics show that annual income plays a factor.  Homes with less than $25,000 in annual income are nine times more likely to not own a car when compared to homes with greater than $25,000.  Additionally, renters are six times more likely to not own a vehicle compared to non-renters.  This is true for renting apartments or condominiums.

Moreover, 4% of multi-person households do not own a vehicle and 19% of single-person households do not either.




How Does Non-Owners Auto Insurance Work?


Non-owner auto insurance is bought as a single-person policy, meaning that only you will be covered by the policy, not anyone else, and not even your spouse.

Fortunately, non-owner auto insurance policies do not have a deductible, which means that you will not have to pay out of pocket before your coverage begins.  Non-owner insurance serves as secondary coverage, and it is used only if the damages aren’t fully covered by the car owner’s primary coverage.

Let’s say for instance that you are involved in an auto accident while driving a friend’s car and their policy has a $30,000 limit on property damage liability.  If you were to cause $40,000 worth of damage, then you would be responsible for paying at least $10,000 toward the damages.  This amount would be paid by your non-owners policy if your policy included $40,000 in property damage liability coverage.

The only way your non-owners policy would pay the damages first is if your non-owners liability limits are higher than the owner of the car you are driving.


 What does a non-owner car insurance policy cover?


Liability coverage for bodily injury and property damage liability is included with the non-owner car insurance policy.  This liability insurance will cover any property damage or injuries that are a result of an accident that you’re legally liable for.  However, it does not cover the borrowed or rented car that gets stolen or damaged while you’re using it.

You are able to purchase different liability limits with a non-owner car insurance policy.  If your state requires that you file an FR-44 or SR-22 financial responsibility form, your state will also decide what liability coverage amount you will need to purchase.

Depending on your state of residence, your non-owner car insurance policy might offer uninsured motorist or medical coverage.  The following coverages are not included with your non-owner car insurance policy:


As discussed previously, your non-owner liability policy will serve as secondary coverage if you are involved in an automobile accident while driving someone else’s car.  The car owner’s auto insurance will be the coverage used first if you’re involved in an accident while driving their car.

Some insurance companies provide non-owner car insurance policies that cover rental cars.  You’ll want to check with your provider on whether rental car coverage is included with your non-owner policy prior to renting a vehicle.  Important to note is that rental car companies are required to provide liability coverage for their rental cars as indicated by the state’s law.


What doesn’t a non-owner car insurance policy cover?


Non-owner car insurance does not cover any damages to the automobile that you’re driving.  Additionally, this type of coverage does not cover any injuries you suffer or property damage caused by an accident.  Furthermore, if you only have a non-owner policy and you’re in an accident with a car that you do own, you will not be covered for damages in this case either.


When Is a Certificate of Financial Responsibility Needed?


A certificate of financial responsibility (SR-22) will need to be filed as proof of insurance if you have DUI/DWI convictions, your license is suspended as a result of uninsured accidents, or any other offenses, as required by your state. SR 22 form

If your state requires this of you and you do not currently own a vehicle, then a non-owners car insurance policy will work.  Once you purchase your auto insurance policy, your auto insurance provider will send the SR-22 form to your state so that the reinstatement process for your license can begin.

Keep in mind that while the SR-22 form will not determine your rates, your reason for needing an SR-22 form clearly will.

For those licensed in the U.S., that do not own a car, but are concerned about liability coverage while driving cars that are not their own, purchasing a non-owners car insurance policy with adequate limits is the way to go.


How to Get an Affordable Non-Owner Policy


In order to get a non-owner car insurance quote, you will only need to provide your basic information, such as your name, age, and address, your state-issued driver’s license number, and a method of payment.  That’s it!

While most major car insurance providers provide non-owner policies, none of them provide a way to get non-owner car insurance quotes online.

Your driving history and personal information contribute to determining your premiums, so the best company for your non-owner car insurance will depend largely on what you can afford.

Additionally, you’ll have to check whether a particular company offers non-owner car insurance in your state.  To be sure that you’re receiving the most affordable rate, it’s wise to compare numerous companies before purchasing non-owner car insurance.

Be sure to let the insurance company know if it’s required that you file an SR-22 or FR-44 with your state when applying for your policy.

Your insurer will send you a proof of coverage in the mail, and sometimes email, once you’ve purchased your non-owner car insurance policy.   If it’s required that you file an SR-22, the insurance company can do that on your behalf.

Where to Find Non-Owners Insurance

The most effective way to comparison shop for non-owners car insurance is by working with an independent insurance agent.  This way you can find the most affordable rates for your situation.


Frequently asked Questions

Who should buy non-owners insurance?

SR 22 form

Non-owners insurance is designed for licensed drivers who do not own a vehicle but have regular access to a vehicle and want to have liability coverage for financial protection in case of an at-fault accident. It can also help people who have a suspended license and do not own a vehicle because the companies that offer non-owners coverage will file an SR-22 form on your behalf.

Does non-owners insurance provide property damage liability?

Yes it does. The purpose of the non-owners policy is to pay for bodily injury and/or property damage claims in the event you are in an at-fault accident while driving a vehicle you have borrowed or rented.

Does non-owners insurance cover damage to the car I’ driving?

4 door sedan

No it does not. Damage to a vehicle you are driving is covered under the vehicle owner’s policy and not the non-owners policy. If for example, you live with your parents, they can list you as an insured driver on their policy or you can purchase non-owners insurance if the cost of having you on their policy is not affordable. However, their insurance company may take issue with that if you have regular access to their vehicle.

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