If you don’t have a car, carrying auto insurance is just an extra monthly expense that you don’t need, right?
Not exactly. Even if you don’t own a car yourself, you can still benefit from carrying a type of policy known as non-owner insurance.
What Is Non-Owner Insurance?
Defined simply, non-owner insurance, or a named non-owner policy, is a type of personal auto policy that offers coverage even if you aren’t the owner of the vehicle in question. That sounds self-explanatory, but what does that mean for you?
What Non-Owner Insurance Covers
- Liability for damage to property or non-passengers caused by your driving
- As a side note, most non-owner policies only offer your state’s limit of liability (check here for a state-by-state breakdown), but remember you can purchase additional coverage if need be
- Protection from uninsured or under-insured drivers, in case you’re hurt by a driver who doesn’t carry enough (or any) liability coverage
- Medical expenses (also known as Personal Injury Protection) for you and those riding with you in the event of an accident
What Non-Owner Insurance Doesn’t Cover
- Collision coverage, or damages to your vehicle by colliding with an object that you could have reasonably avoided
- Comprehensive coverage, or damages to your vehicle by falling objects, animals, storms, or even theft
- Your belongings, so if your wallet or luggage gets stolen from a vehicle you’re borrowing, you’re out of luck
Who Non-Owner Insurance Protects
Non-owner insurance protects you, the driver. Specifically, it protects your financial interests and assets.
Consider this scenario: You borrow a friend’s car to drive up to the grocery store. You don’t carry insurance. The light is about to change. You’re certain you can make it.
The light flicks red before you reach the intersection, but you’re positive you’re in the clear.
Crunch. The accident was a fender-bender, but nothing serious — aside from the other driver’s whiplash and broken wrist. You also crashed into a street sign.
You’re now on the hook for the other driver’s medical bills, damages to government property, and damages to the other driver’s car. Not only that, but you risk license suspension and jail time.
Your money-saving decision not to carry auto insurance while you were between cars has now cost you almost all your assets.
Who Needs Non-Owner Insurance
The simple answer to this question is, “anyone with a driver’s license and regular access to a vehicle that isn’t theirs.” To break it down further, you might need this type of policy if:
You Rent Cars Often
Some credit cards may provide limited comprehensive or collision coverage. However, they don’t provide liability insurance, and what the rental company must carry on their vehicles by default may not be enough.
You Borrow Cars With Bare-Bones Coverage
People want to save money on their auto policies. Many do that by only holding the state’s minimum limits of liability. However, if the damage you cause when driving that car exceeds those limits, you could wind up paying the rest of the cost.
You Don’t Want a Gap In Your Insurance
Restarting an insurance policy with a gap in your coverage history often leads to you being treated as a high-risk driver. This can mean you’re forced to pay much higher rates.
You Have Major Traffic Offenses
Even if you don’t have a car in the wake of a DUI, DWI, or other severe traffic conviction, many states may require you to carry liability coverage. This is known as an SR-22 requirement. If you want to know more about saving on insurance when you have this kind of requirement, check out our guide here.
Who Doesn’t Need Non-Owner Insurance?
The answer to this question might seem simple, but it’s not as cut and dry as you might think. You won’t need a non-owner policy if:
You Have a Car
This might seem obvious, but if you own a vehicle of your own, you don’t need non-owner insurance. Rather, you need a personal auto policy in line with your state’s minimum requirements.
You’re a Primary Driver
If you’re listed as a primary driver of a vehicle on someone else’s policy, even if you have no financial interest in the car itself, you won’t be able to get a non-owner policy. This also applies to teenage drivers! So, if you want to save more on your teen’s insurance when the time comes, check out this guide.
You Drive for Your Business
If you drive for business reasons, a personal non-owner policy isn’t for you. Personal auto policies aren’t meant to cover business use of a vehicle. Determining the line between personal and commercial use can be difficult, but this guide can help.
Does This Save Money?
It depends on your state and personal circumstances. The average named non-owner policy costs around $474 every year. However, compared to the tens, or even hundreds of thousands of dollars you could lose by not carrying insurance, less than $500 is a drop in the bucket.
Circling Back
You now know that a named non-owner insurance policy is an option available to those with regular access to a vehicle who don’t own the vehicle themselves. It helps keep you covered if you ever get into an accident when driving a car that doesn’t belong to you. It can even cover gaps left by other insurance policies, keeping you safe from massive financial losses.
If you think you could benefit from a named non-owner policy, or have any other questions about the types of insurance available to you, check out our blog or contact us for more information today!
