Non-Owner Car Insurance
Everyone borrows a car from time to time. Whether it’s from a friend, family member, employer, or renter, there is a percentage of drivers on the road who are not the legal owners of the car. While the car is not required to be registered in their names, insured drivers are a legal must.
For that reason, insurance companies offer non owner car insurance for drivers who do not have the car in their name. That way, drivers who don’t own the car they are driving are covered in the event of an accident that they’re at fault for.
A non owner policy has lower rates than a standard liability policy, which can help your budget if you wish to own a car in the future. It’s economical and smart to take on non-owner car insurance in case you borrow or use a vehicle that is not yours.
Typically, a driver who would qualify for non owner insurance doesn’t own a car or is not a part of another person’s policy where they are a driver of a vehicle. Drivers of public transit vehicles are known to have non owner insurance. Having that form of personal liability coverage is not just legally required; it also reduces what would be high premiums for driving uninsured.
Protection against raised rates, injury, and property damage charges are guaranteed. Here is how this kind of coverage works, the costs, and how InsuranceNavy helps you find the right policy for the vehicle you’re being lent.
What Does Non-Owned Car Insurance Include?
The main coverage you will be receiving with non-owner car insurance is liability coverage for property and bodily damages to others in anaccident.
Suppose someone were to be injured or have their vehicle damaged in a collision that you caused. In that case, you will be protected from any additional charges with the repairs and medical fees being covered by your insurance company. Most states have a requirement for this in place to keep uninsured drivers off the road.
Non owners car insurance also includes uninsured motorist coverage to satisfy this legal requirement further if a standard liability policy is out of your budget. This would also cover you, should you be involved in an accident with a driver with no insurance of their own.
If your car is a rental, the provider of the vehicle may include a rental car liability policy. A rental car policy can be paid for by your insurance company, credit card, or rental company. In most cases, damages to the vehicle and injuries in an accident are covered. A rental car policy may include coverage against theft or vandalism.
If you purchase non-owner car insurance, you will not have comprehensive or collision auto insurance included. The car you are driving will most likely already have certain coverage based on what the actual owner bought. If you were to drive without comprehensive or collision coverage, you are not insured against damage to the vehicle and yourself–even if the collision was not your fault.
You may be able to purchase optional coverage with your insurance company or car leaser.
How does Non-Owned Car insurance work?
Even with all the situations you would be covered for, non owners car insurance is secondary coverage. This means that after the primary insurance policy kicks in and pays its amount, the remaining amount will fall upon the secondary one. Before a non owners policy kicks in, you will not have to pay anything extra, considering there are no deductibles.
Non owner insurance is purchased on a per-person/driver basis. That’s why it is not called non owners insurance–there can only be one person insured on the policy, and everyone else needs their own. Some non owners policies may also come with a coverage limit.
When would I need Non-Owner Policy?
We’ve talked about how a driver can legally operate a car that they do not own under special circumstances like borrowing or renting.
You’ve become the legal driver for a car you don’t own and are eligible for non owner insurance when:
- Renting cars - A renting company or leaser legally owns rental cars. The car shows up in their name while you’re driving. If you rent a car for more than 50 days annually, it may be more pricey than the non owner coverage annual fee. Always confirm that you will receive liability coverage at the rental counter.
- Borrowing cars - When you borrow a car, you’re using one that someone you know owns–like a friend or family member whose insurance policy you’re on. You have the option to drive without personal coverage, but you will also be without coverage for the car while you drive it.
- Driving gap - A driving gap is when you take a break from driving for a considerable period of time. You may have sold your car or gone out of town, so you can not drive it for the time being. A gap in coverage can be a red flag to insurance companies and signify a high-risk driver. To prevent that, non owners car insurance isn’t just the right move but also can save you money.
- Public transportation - A driver who works in public transportation may also invest in non owner insurance as they drive their assigned bus or taxi, primarily because the vehicle does not belong to them. Some employers may offer insurance of their own. Company cars work similarly.
- DUI - Driving under the influence will more often than not result in a license suspension. At that point, you will have to file a non owner SR-22 to get your license issued back. Since a DUI can stay on your driving record for up to five years on average, you will have to maintain that policy with higher rates for the years to come. A non owner SR-22 is a less expensive option because it saves you a bit on your premiums.
- About to buy a new car - When it comes time to upgrading your vehicle, there is always that period of time in between selling your car and receiving your new one when you’re without a car. Swapping your full coverage for non owner coverage will save you money during that time.
How much does non-owned insurance cost?
Like many other insurance policies, non owner insurance is dependent on your desired coverage and driving history. A higher risk driver will have more of a challenge finding a policy than lower risk drivers. In terms of savings, non-owner car insurance is a cheaper alternative to standard coverage.
Rates under a non owners policy can be anywhere from 5% to 15% less than they would for the normal liability insurance. There are no deductibles that you would have to pay whenever a claim is filed.
The only way you could be spending more money than anticipated on non owner insurance is if you want to include extra coverage (like collision or comprehensive), or if you are insuring more than one non owner.
What if I use a car owned by work or an employer?
If you were to take a company car from work, a non owner policy may have additional requirements or exceptions. The case depends on the company you work for. Your employer usually covers business purposes. If you were to get into an accident in the company car, the damages done to the car are covered.
Non owners car insurance can save you money when driving the company car for personal reasons outside of work. Using a car provided by your employer for anything other than work purposes puts the responsibility of covering any damage done on you.
A Non owner policy would insure you in that case, while the car remains in your employer’s name.
How do I purchase non-owner car insurance?
Buying and inquiring about non-owner car insurance always begins with contacting your insurance agent. At InsuranceNavy, our agents are available every Monday through Saturday from 10am to 6pm to assist you in finding the best and affordable auto insurance for you.
Here are some things to consider when you are shopping for non-owner car insurance:
- Have an acceptable driving history - Insurance companies always look at your driving history to determine your rates and risk. The best driving records are those with no gaps, fewer claims, and an overall demonstration of safe driving.
- Ask for and receive a quote - Insurance agents or customer service will give you a quote based on your driving record. If you’re the type of customer who likes to shop around and compare quotes for the best deal, then you may look at both regional and national names. Regional companies like InsuranceNavy are known for low non owner rates.
- Down payment or one lump sum - Making a down payment towards your insurance policy will activate the plan as soon as possible. In some cases, paying for the whole policy upfront saves policyholders on their yearly premiums.
- Maintain coverage - Avoiding a lapse in insurance is crucial under any auto policy. Maintaining your coverage can be done by continuing the practice of safe driving, making your payments, and taking care of the car you do not own so it will always be drivable.
When Don’t You Need a Non-Owner Policy?
By now, we’ve already gone over some of the circumstances where a non owner policy would not make sense and would not be economical. Obviously, if you own a car in your name then non-owner car insurance won’t apply. Using a car belonging to your employer for work-related purposes does not require non-owner car insurance. The employer’s auto policy would cover the vehicle.
Similarly, if you frequently use a car belonging to someone who lives in the same household as you, then their insurance policy may cover you while you’re behind the wheel. You may even be listed as the secondary driver, which you do not need to own the vehicle in order to be.
Another specific example would be if you rarely borrow a car belonging to someone else. For most insurance companies, you don’t need a non owner policy if you are driving the car with the owner’s permission. Their own insurance policy would cover you. However, there may be some excess costs that can become your responsibility.
Frequently asked questions about non owner insurance
By now, you should have answers to some of the most frequently asked questions about non-owner car insurance. If you have more questions feel free to call us or visit one of our convenient locations.
To review, here are all the questions we have answered condensed:
How do I know if non-owner car insurance is right for me?
Policyholders with non owner coverage are usually car renters, borrowers, or any other case where you drive a car that you don’t own.
How do I get non-owner car insurance?
Talk to your insurance agent about their non owner rates and receive a quote. Valid driver’s license and tangible driving history are both required.
How much does non owner insurance cost?
A Non owner policy is an affordable option for drivers saving up for a car of their own. A non owners policy can cost anywhere between 5% and 15% less than a standard liability policy.