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You most likely know the basics of getting auto insurance for your car, but what about a car you’re driving that’s not yours?
If you don’t own a car, and rent or borrow cars quite frequently, you could find yourself in a situation where you need an additional layer of coverage.
This is where non-owner insurance comes in. So what exactly is it, and when would you need it? Let’s dig in:
How non-owner car insurance works
Non-owner car insurance provides you with bodily injury and property damage liability coverage when you’re driving a vehicle that’s not yours.
Let’s say that you rented a car and purchased rental car insurance. This rental policy comes with liability coverage, but the limits could be lower than you need.
If you get into a bad accident while driving a rental car, and the damage is more than the liability coverage limits, you’re on the hook for excess charges. If you carry non-owner car insurance, it’ll cover the excess costs over the limits of the rental car policy.
Or maybe you’re temporary without a set of wheels, and you’ve been borrowing your aunt’s sedan to get around town. Does her car insurance follow her car and does it protect you?
If you get into an accident and you’re at fault, your aunt’s liability coverage would first pay for the damages. If the damages exceed what’s covered by your aunt’s insurance, then your non-owner liability coverage would pay for the damages left over.
In some states, non-owner car insurance also comes with uninsured and underinsured motorist coverage. It could also come with personal injury protection and MedPay. But it’s important to double-check with an insurance company what coverages are included in non-owner insurance.
What doesn’t it cover
Keep in mind that if you own a vehicle, you can still have a non-owner insurance policy. But it won’t cover that vehicle or physical damage on it. Non-owner insurance only covers the liability portion, which only covers property damage or injury you cause to others in a car accident.
It doesn’t come with a collision or comprehensive coverage because a specific car would have to be named in the policy, such as a car you own or lease.
It also doesn’t cover vehicles you don’t own in your household. That’s because you should be listed on the car owner’s policy if you live under the same roof.
Who non-owner car insurance benefits
If the liability coverage of the rented or borrowed car is minimal, then it’ll protect you in the case that there are excess charges that exceed the limits of the policy.
Should you have it?
Opting for a non-owner auto insurance policy could benefit you in the following scenarios:
When you’re renting a car, and it doesn’t have enough liability insurance coverage. This is usually the case, so you’ll want to read the fine print to make sure.
If you don’t own a car and rent cars frequently. If you’re constantly renting cars for work or personal travel, it might make sense to purchase non-owner insurance. The more often you rent a car, the greater the likelihood of getting into an accident while driving.
When the person renting the car is under 21. A lot of car-sharing programs limit the liability coverage for young drivers. If you’re 21 or have someone in your household that’s young, consider adding this policy.
If you borrow a relative’s or neighbor’s car often, and they have minimal liability coverage.
When you want to have continuous coverage. If you don’t have a car at the moment, but plan on getting a car in the near future.
If you want to protect your driver's risk status. Insurance companies normally consider drivers who never had prior car insurance or don’t have continuous insurance coverage as having a higher risk. In turn, you’re prone to higher insurance premiums. By having non-owner auto insurance, you’re likely to be qualified for a lower insurance premium.
When you don’t need it
You can probably do without non-owner car insurance in the following instances:
If you own a car, and have both comprehensive and liability insurance on your policy, rental cars are usually covered.(*Check with your agent/policy first though) And if your own car insurance policy has higher limits on liability coverage than what’s offered in the coverage that’s offered by the rental car company, then you should be okay.
Also, some credit cards offer rental car insurance, so you might be able to do without non-owner liability. Of course, you’ll want to check the limitations and coverage amounts. Otherwise, if the liability insurance on your car rental is less than you’d like, purchasing a non-owner insurance policy could offer the protection you need.
How to get non-owner car insurance
Most insurance companies offer non-owner car insurance. There are a few companies where you can only purchase non-owner car insurance if you’re an existing policyholder.
If you can’t get an estimate online or find information easily on the insurance carrier’s website, you might need to speak with a rep. If you’d like a quote, give the insurance company a ring. You can also meet with an agent to talk about your options and get a quote for a policy.
What it costs
Expect to pay the same amount as you would for minimum liability coverage. Depending on a handful of factors, such as where you live, your risk profile and the insurance company.
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