Non Owner Car Insurance: What Is It and Who Should Have It?

Non Owner Car Insurance: What Is It and Who Should Have It?

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Non-owner car insurance is a liability policy for those who drive, but don't own a car. Whether you rent or borrow a car often, or need to file for an SR-22 without a vehicle, a non-owner policy is a relatively inexpensive option to purchase auto insurance liability coverage. Non-owner auto insurance rates are often 5% to 15% cheaper than those for a standard policy. However, non-owner insurance isn’t the right choice for many people, including those who cohabit with a car owner or would otherwise be required to be listed on a car’s primary policy.

What is Non-Owner Car Insurance?

Named non-owner insurance, which is also sometimes called non-drivers insurance, is a type of auto insurance that provides liability coverage for bodily injury and property damage when you are driving a vehicle you do not personally own. So, should you be in an accident with another driver and found to be at-fault, your non-owners insurance policy would shield you from lawsuits, just as a normal liability policy would.

Aside from liability coverage, which pays for injuries and property damage to the other party if you’re in an accident, a non-owner auto insurance policy can also include:

  • Medical Payments or Personal Injury Protection Coverage
  • Uninsured or Underinsured Motorist Liability Insurance
  • Rental Car Liability Coverage

However, since there’s no specific vehicle assigned to a non-owner auto insurance policy, it won’t include comprehensive or collision coverage. Therefore, it won’t cover any damages to the car you’re driving or medical bills or other costs from injuries you sustain if you’re in a collision.

How Does Non-Owners Auto Insurance Work?

Non-owner car insurance is purchased on a per-person basis so only you will be covered by a policy, not your spouse or anyone else.

Typically, non-owner policies also don’t have a deductible, meaning you don’t have to pay any money yourself before coverage kicks in. However, this is because non-owner insurance is generally secondary coverage, and is utilized only if the car owner’s primary coverage isn’t sufficient to cover all damages. For example, let’s say you got into an accident while driving your friend’s car, and your friend’s insurance had a $25,000 limit for property damage liability. If you had caused $40,000 of damage, you would be responsible for the excess $15,000 in damages. This amount would be covered by your non-owners policy, but only if it included at least $40,000 of property damage liability coverage. Unless your non-owners liability limits are greater than those of the person whose car you’re driving, your non-owners insurance won’t come into play.

How to Get a Cheap Non-Owner Policy

To get a quote for non-owner insurance, and to purchase coverage, you need only provide some basic personal information, along with your driver’s license number and a method of payment (such as credit card).

Though most major auto insurance companies offer non-owner policies, none offer non owners insurance quotes online. Even GEICO, which is renowned for the ease of its online process, requires you call an agent to get a quote. The following tables lists the numbers for several top insurers to call and get a quote.

CompanyPhone Number
State Farm800-782-8332
The General1-800-280-1466

Which company is the best choice for non-owner auto insurance will depend, in-part, on your driving history and personal information, as these are the factors which will help determine your premium. In addition, some insurers do not provide non-owner insurance in certain states, so some companies may not be an option where you live. To ensure you pay the cheapest rate, we recommend calling multiple insurers and comparing at least three to four quotes before you make a purchase. Also, if you need an SR22 or FR44 files, make sure to note this when speaking with the insurer.

Once you’ve purchased a non-driver insurance policy, your insurer will send physical proof of coverage. You can usually also get a copy emailed immediately, if need be. The insurer can also file an SR22 form on your behalf, if you require one.

Do You Need Non-Owner Auto Insurance?

You’re not legally required to have auto insurance if you don’t own a car. But there are several reasons why you would want to have non-owners car insurance:

  • You regularly rent cars
  • You regularly borrow other people’s cars
  • You sold your car or won’t drive it for an extended period of time, such as while deployed overseas
  • You need an SR-22 or FR-44, because of a DUI or serious traffic infraction

You Regularly Rent Cars

If you rent vehicles often, a non owner policy could easily be cheaper in the long run than repeatedly buying rental car insurance. Insurance bought from the car rental company usually costs at least $20 a day, so if you're renting a car for, say, 50 or more days a year, those daily costs will likely add up to more than the cost of an annual non-owner auto insurance policy. Just make sure to:

Confirm with the insurer, before buying a non-owner policy, that it will provide liability coverage when you’re driving a rental car. Check if any damages to the rental car would be covered by your credit card’s rental car insurance. If not, you may want to purchase a collision-damage waiver from the rental company.

The rental car insurance afforded by a credit card actually won't cover you should someone sue you for damages; instead, this free card perk only covers damage to the rental car. Combining your credit car rental insurance with the liability portion of a non-owners policy would actually provide you with the most comprehensive coverage, outside of carrying a policy for a vehicle you own, since the insurance on your car also affords some coverage for a rental car.

You Regularly Borrow Cars From Others

If you find yourself borrowing cars frequently from friend or other people, non-drivers insurance may also be a good choice. It ensures that you have a certain level of coverage in place every time you drive, so you don’t have to worry whether the car owner’s insurance policy will cover you or if its liability limits will be too low.

Just note that if the car you borrow belongs to someone you live with, or you borrow the same car consistently, you will probably need to be added to the car owner’s insurance policy for it to provide you with primary coverage. Otherwise, even if you have a non-owner policy in place, the company that issued it may not cover you at all in the event of an accident.

You Sold Your Car or Won’t Drive for an Extended Period of Time

Nearly every insurer raises rates for drivers that have had a “lapse in coverage”, meaning policyholders who had no auto insurance in place for a period of time following a period during which you had insurance. Even if you never operated any vehicles during the time in which you lacked insurance, you will be considered a higher risk to insure, and will not qualify for your best rates.

Since non-owner auto insurance is less expensive than traditional coverage, it can be advantageous in the long term to stay covered using a non-owner policy, especially if you expect that you’ll need insurance later on. This is particularly the case if you have an expensive vehicle. Also, if you are in the military and being deployed overseas, a non owner policy may be your cheapest option, even though some companies like USAA and GEICO offer discounts for periods in which you leave the country. If that is your own situation, you would have to compare quotes across the different insurers to be sure.

Non-Owner SR-22 Insurance

If you’ve received a DUI or committed a serious traffic violation, you may need to get SR-22 or FR-44 insurance in order to get your license reinstated. Depending on the SR-22 requirements, you may also need higher limits and have to maintain this coverage for a period of two to five years in order to maintain your license. Since you can’t file an SR-22 by yourself, it needs to be done by your insurer, a non-owner SR22 policy can come in handy, particularly if you don’t have a car. The company from which you purchase the non-owners policy can file the SR-22 on your behalf and get you on your way to a license reinstatement.

A key benefit of using non-owners insurance for an SR-22 is that premiums will be less expensive. You’ll still likely face higher rates than others, due to whatever reason the SR22 was required, but premiums won’t be as steep as they might have been with a traditional auto insurance policy.

Keep in mind, however, that not every insurance company, especially smaller ones, will sponsor an SR-22 or FR-44. If yours doesn’t, you can get a non-owner policy through another company and have them file the SR-22 on your behalf.

When You Should You Not Get a Non-Owner Policy

If you are any of the following, you should not get a non owner auto policy if:

  • You own a car
  • You borrow the car of someone you live with
  • You rarely borrow someone’s car
  • You use a company car, but only for business

You Own a Car or Live With the Person Whose Car Your Borrow

If you own a car, you do not need to purchase non-owner car insurance, since your liability coverage will generally cover you if you borrow or rent another person’s vehicle. This isn’t always the case, though, so it’s wise to confirm your policy’s details with your insurer (you’ll typically enjoy at least some level of coverage). If you want additional liability protection, and umbrella policy is a better solution.

On the other hand, if you don’t own a car, but do sometimes borrow the car of a parent, spouse or other person you live with, you should get your name added to their auto insurance policy. Even if you use the car only occasionally, their insurer should be made aware that you live together, and may require you to be named as a driver. Failing to do this may result in the insurer not covering certain, or any, costs should an incident occur.

You Rarely Borrow Someone’s Car

You don't technically need non owner insurance if you're driving someone else's car with their permission. If you get into an accident with that car, its owner’s insurance will typically be considered to be the primary coverage, and so cover the damages associated with the accident. Just keep in mind that:

If a claim is made, your friend’s rates may rise, even though you were the driver at fault. If the damages exceed the limits of the owner’s insurance policy, any excess costs will be your responsibility. Not every insurer provides coverage when someone other than the owner is driving the car. Make sure to check you are covered before you take the wheel.

You Drive a Company Car

If you drive a company car--that is,the car you drive regularly is owned by your employer--the situation can be a little complicated. Typically, when the car is being driven for business purposes at the request of your employer, the company, or its insurance, will cover you in any accidents. However, if you use a company car for personal activities on a consistent basis, you’ll likely be held liable for any damages that occur during personal use, and so should consider getting non-owners insurance for the vehicle.

How Much Does Non-Owner Car Insurance Cost?

It’s hard to compare quotes for a non-owner policy, as compared with a traditional auto insurance policy, since you have to call up each insurer individually to comparison shop. Overall, our research found rates for a non-owner policy to be 5% to 15% less expensive than for a standard policy with a similar coverage level. However, the savings can be significantly larger when comparing the cost of a non-owner policy to that for a policy with full coverage, or if you were to insure an expensive car.

The cost of a non-owners insurance policy can vary depending upon:

  • Your coverage limits
  • Your driving history
  • Where you live
  • How often you expect to drive

If you are getting a non-owner policy in order to get an SR-22, it is important to remember any DUIs or incidents on your record will still negatively affect your rates, even with a non-owner policy. Your premiums with a non owner policy will likely be greater than what you paid before the incident associated with the SR-22, but less expensive than a rate you would be quoted if you still had a car, along with your flawed driving record.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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