What is non-owners car insurance?

If you don’t own a vehicle, you might assume that you don’t need to purchase your own car insurance coverage. However, for some occasional drivers, a policy known as non-owners auto insurance can be a smart idea.

Here’s a look at what non-owners car insurance policies are, what sort of coverage they offer, and how to choose the right policy for you and your needs.

Understanding non-owners car insurance policies

A non-owners insurance policy is a type of auto insurance coverage for drivers using a vehicle they don’t own. These policies are reserved for drivers who don’t have their own vehicle and therefore aren’t required to buy their own separate coverage.

Unlike your options for a standard car insurance policy, buying auto insurance without a car comes with more limitations. While a typical full coverage auto policy includes liability insurance, collision coverage, and comprehensive insurance, non-owners insurance provides you with only basic liability protection. That means that in the event of an accident, it won’t cover damage to the vehicle you're driving or your own injuries.

As with standard policies, you may also be able to purchase supplemental medical payments coverage, personal injury protection (PIP), and uninsured/underinsured motorist coverage with your non-owners policy. The exact coverage options and features available will depend on your state and the carrier you choose.

Who should consider purchasing non-owners insurance policies?

If you don’t own a vehicle, you aren’t legally required to purchase an auto insurance policy in any state. In fact, you can’t buy a standard policy if you don’t own a vehicle to attach it to. But if you drive on occasion, a non-owners auto insurance policy provides a good layer of protection.

You may want to consider buying a non-owners policy if you:

• Frequently rent or borrow vehicles from others

• Drive regularly but don’t have consistent access to one particular car

• Want to maintain continuous coverage (to avoid a coverage gap), even when you don’t own a car

• Are in a transition period, such as moving to a new location or waiting on a vehicle you’ve ordered

So, do you need insurance to drive someone else’s car? No, you don’t. That owner’s policy will follow their vehicle and, with few exceptions, the coverage will still protect you from liability while you’re behind the wheel, as long as they’ve given you permission to drive.

However, even with someone else’s coverage, you might not be protected enough.

What does non-owners car insurance cover?

Non-owners auto insurance provides you, the driver, with your own liability coverage while you’re driving someone else’s vehicle, whether borrowed or rented. It includes bodily injury liability and property damage liability to cover other drivers’ losses if you are responsible for an accident.

Depending on the state and the car owner’s coverage options and limits, your non-owners policy may act as secondary coverage. This means that it would only kick in if the owner’s policy doesn’t cover the property damage or bodily injuries in an at-fault accident. In this case, your non-owner policy will kick in to pay for damage that exceeds the vehicle owner’s coverage limits.

You may also choose to add underinsured or uninsured motorist coverage to a non-owners insurance policy. This optional coverage protects you personally if you’re involved in an accident for which you are not-at-fault. If the other driver doesn’t have insurance — or their policy’s liability limits aren’t enough to cover your expenses, medical bills, etc. — then this coverage will step in to pay the difference.

Lastly, some non-owners insurance policies will even allow you to add many of the same features and options as a standard policy, such as rental car insurance or roadside assistance. Even if you don’t own a vehicle, this coverage can be utilized to provide you with an alternate vehicle if your rental (or the car you usually borrow) is wrecked, or even dispatch help if you’re stranded on the side of the road.

How much does non-owners car insurance cost?

Non-owners policies typically cost less than a standard liability policy. While actual costs vary based on your driving history, the state where you live and other factors, most people can purchase a non-owner policy for a few hundred dollars a year. Of course, high-risk drivers and those with a spotty driving record that includes multiple infractions will pay more.

Most major car insurance companies offer non-owners policies. To ensure you get the best price, you can get a quote directly from different carriers to compare insurance rates, contact an insurance agent to shop around for you or use an online tool.

Factors to consider when choosing a non-owners policy

If you decide to purchase non-owners insurance coverage, there are a few factors to consider:

• Coverage limits and deductibles. Since this coverage will be secondary in many situations, you may not want limits as high as if you owned a vehicle. On the other hand, you might prefer high coverage limits to give you maximum financial protection no matter what you drive.

• Provider reputation and financial stability. By analyzing consumer reviews and complaints, a carrier’s reputation for processing claims, and even their financial stability (through agencies like AM Best), you can get a good idea of which auto insurance companies will pay out when necessary and remain solvent.

• Cost of premiums and payment options. Perhaps the biggest consideration when buying any insurance policy is the cost. It’s important to balance the coverage options you choose with how much you can afford to spend. You may also want to see what payment options the carrier offers; some will allow you to pay premiums in monthly installments while others may offer a discount if you pay your full six-month premium upfront.

No matter which insurance policy you choose, read your policy documents carefully to understand the terms, coverages and any exclusions.

When non-owners car insurance may not be necessary

With all this said, a non-owners insurance policy isn’t right for everyone. In some cases, it may be insufficient while in others, this coverage could be redundant.

Drivers who probably don’t need to buy non-owners insurance include:

• Individuals who own a vehicle and already have a standard auto insurance policy

• Drivers who have regular access to a household vehicle and are listed as a named insured or allowed driver on another policy

• Drivers who use employer-provided coverage and only engage in business-related driving

• Those with access to commercial car-sharing services or rental programs, which offer their own insurance protection

A non-owners auto insurance policy can be a great option for occasional drivers who don’t own a vehicle, to provide added financial and personal protection each time you get behind the wheel of a borrowed or rented car. While this coverage is more limited than a standard auto policy, it can still offer you a combination of liability, medical payments, PIP and uninsured/underinsured motorist protection to give you peace of mind on the road.