By Tim MaxwellWhat Is Non-Owner Car Insurance?
Quick Answer
Non-owner car insurance is a type of policy that gives you liability protection if you don’t own a vehicle but regularly borrow or rent one. Even if the car owner’s standard policy covers you, the extra liability coverage could come in handy if their limits are low.
Do you regularly drive someone else's car? Perhaps you drive a spouse's or parent's car for work or often use rental cars while traveling. If you're concerned about being covered if you're involved in an accident, non-owner car insurance might be a possible solution.
Non-owner car insurance covers drivers who don't own a car but want liability coverage when borrowing or renting one. This insurance may also help you avoid a lapse in coverage that could prompt a premium increase when you take out your next policy.
How Non-Owner Car Insurance Works
Non-owner car insurance provides you with liability coverage if you don't own a vehicle but regularly drive someone else's. If you cause an accident, the owner's auto insurance policy serves as the primary coverage, and your policy is secondary liability coverage for damages that exceed the owner's coverage limits, up to your policy's limit.
Let's say you're driving a friend's vehicle and cause an accident. The total damage comes to $30,000, but your friend's liability coverage caps at $25,000. If you have a non-owner policy with a liability coverage limit of $30,000 or more, your policy will kick in to cover the difference up to your policy's limit.
Keep in mind, non-owner car insurance covers injuries and property damage you cause in a car accident. It does not, however, cover damage to the vehicle you're driving or your own injuries if you're at fault for the wreck.
What Does Non-Owner Car Insurance Cover?
Non-owner car insurance policies differ from state to state but generally provide liability coverage. If you cause an accident while driving or renting a car that isn't yours, this liability policy covers bodily injury and property damage costs.
Depending on your state and insurer, your policy might include more robust coverage options, such as:
- Uninsured and underinsured motorist protection: This insurance covers your bodily injury and property damage if you're hit by another driver with insufficient or no insurance coverage. Some policies include coverage for medical bills, lost income and other injury-related costs.
- Medical payments (MedPay) or personal injury protection (PIP): MedPay coverage pays for medical treatment for you and your passengers after an accident. PIP insurance may cover accident-related injuries, lost wages and other costs no matter who is at fault.
One unique aspect of non-owner car insurance is that it isn't assigned to a specific vehicle; it's assigned to the driver. For this reason, non-owner car insurance doesn't include comprehensive or collision coverage, which helps pay for repairs to the car you're driving.
Do I Need Non-Owner Car Insurance?
Non-owner car insurance can be valuable for liability coverage in certain scenarios, such as the following:
When You Frequently Borrow Someone Else's Vehicle
If you regularly drive another person's car, you might wonder whether the car owner's policy covers you or if their liability limit is enough. Non-owner insurance could give you extra protection by adding liability coverage on top of the car owner's standard policy. For example, if you frequently borrow a friend's car to get to work, a non-owner policy could give you peace of mind, knowing you have added protection.
When You Rent Vehicles Often
If you rent cars regularly while traveling, purchasing a non-owner car insurance policy may be a more affordable option over time than paying for rental car insurance at the counter every time.
The average cost of rental car insurance is roughly $50 per day. Meanwhile, a non-owner car insurance policy will run you about $325 per year on average, according to Insurance.com. Of course, rental and non-owner car insurance rates vary by state and insurer, so run the numbers to confirm whether a non-owner policy pencils out for you.
When You're Between Cars but Want to Stay Insured
Most insurers charge a higher premium after a lapse in coverage—a period when you don't have insurance. For example, if your car was totaled and you haven't replaced it yet, you may not need insurance if you're not driving during this time. But going without coverage could make you a higher-risk driver in the eyes of insurance companies. This could lead to higher rates when you do get a policy, or worse, refusal to insure you altogether. Buying non-owner auto insurance could prevent a lapse in coverage if you plan on purchasing a policy in the future.
Learn more: What Is a Car Insurance Grace Period?
When You Don't Need Non-Owner Car Insurance
While non-owner car insurance can provide valuable protection when driving a car that isn't in your name, it's not always necessary. Here are a few times when you don't need this type of liability coverage.
When You Own a Car
If you already own a vehicle, you don't need non-owner car insurance. You need a standard policy that protects both you and the car with liability insurance, plus any additional coverages you choose, such as comprehensive and collision.
When You Drive a Car in Your Household
Remember, non-owner insurance is only available to those who do not have regular access to a vehicle in their household. Even if you are not the owner but regularly use a car owned by a family member, roommate or friend in your home, you will not be eligible for a non-owner policy. Instead, insurance companies will require you to be listed as a driver on the car owner's policy. And if you don't inform your insurer, they could deny any claims from an accident.
When You Rarely Borrow Another Person's Car
You might not need non-owner car insurance when you occasionally drive someone's car with their permission. Insurers call this "permissive use," and they may cover you for damages and liability (but not always). Have the owner double-check their policy before driving to be sure.
When You Drive a Company Car
If you drive a company car for business purposes, you shouldn't need non-owner car insurance because the company's policy should cover you. But the company policy might not cover you if you use the car for personal errands, like taking the kids to practice or running to the grocery store. In that case, you might need non-owner car insurance for liability protection if you cause an accident.
When You Don't Drive
If you drive very rarely—or don't drive at all and don't plan to again—you probably don't need car insurance. Non-owner car insurance is only useful if you frequently borrow or rent a vehicle or want to prevent a lapse of coverage.
How Much Does Non-Owner Car Insurance Cost?
Premiums on non-owner car insurance are 5% to 15% less than a standard policy with the same coverage, according to ValuePenguin. That's because this type of insurance is intended for occasional one-off users, not everyday drivers. As with standard auto insurance policies, your rate depends on several factors, including your age, coverage amount, ZIP code, driving history and coverage limits.
Learn more: Factors That Affect Your Car Insurance Costs
How to Get Non-Owner Car Insurance
Getting non-owner car insurance can be challenging because not all providers offer it. You may have to call several insurance companies to get quotes. Rates vary since each insurer follows its own guidelines when setting premiums.
While you can get quotes for most types of auto insurance companies online, you may need to call various companies to get quotes for non-owner car insurance. Many major insurers that offer non-owner car insurance don't list it on their website or their online quote process requires you to enter a vehicle.
If you're not sure where to start, here are a few major carriers that offer non-owner car insurance.
| Provider | Phone Number |
|---|---|
| Allstate | Available through your local agent |
| GEICO | (800) 207-7847 |
| State Farm | (800) 782-8332 |
| Travelers | (800) 252-4633 |
If you already carry another type of insurance, like homeowners or renters insurance, you might ask your provider if they also offer non-owner car insurance. If they do, you may qualify for a bundling discount and lower your total premium costs.
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The Bottom Line
Non-owner car insurance can provide you with valuable liability protection if you drive someone else's car, as long as you don't live with them. This type of insurance may be a good option if you want additional coverage beyond what the car owner's policy provides.
Whether you purchase non-owner auto insurance or a standard policy, comparing insurance rates from multiple providers is always a good idea. Experian can help you shop rates and potentially save money on your insurance costs.
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About the author
Tim Maxwell
Tim Maxwell is a former television news journalist turned personal finance writer and credit card expert with over two decades of media experience. His work has been published in Bankrate, Fox Business, Washington Post, USA Today, The Balance, MarketWatch and others. He is also the founder of the personal finance website Incomist.
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