If you don’t own a car, but still find yourself driving frequently, you may be worried about what happens in the event of an accident. No matter who you are, getting into an accident can cost thousands, so if you are uninsured it can be financially ruinous. Luckily, for drivers who don’t own a car there is the aptly named Non-Owners insurance to protect you.
- What is Non-Owners Insurance?
- Who Should Get Non-Owners Insurance
- Who Doesn't Need Non-Owners Insurance
- Limitations with Non-Owners Insurance
This type of auto insurance basically provides you with liability and property damage coverage when you are driving a car not owned by you. Some companies even offer extra coverage such as medical payments and uninsured motorist under their Non-Owners coverage.
- People who frequently rent cars
- People who borrow cars from non-relatives or friends
- People who need an SR-22/FR-44
Non-Owners insurance is a great deal for people who find themselves behind the wheel of a car frequently, but do not actually own one. The coverage is cheaper than full time coverage, and can really bail you out financially if you do get into a car accident. Perhaps you work in a busy city with little use for a car, but business requires you to rent cars to travel outside of the city. This insurance would be perfect for that. Although with the right credit card, you may be able to get all of your rentals covered.
As well, if you find yourself borrowing cars frequently from non-friends or relatives, this insurance would also be great for you. Perhaps you are a nanny who uses a family car to usher children around. Most likely the family would not add you to their auto policy. Ultimately, their policy would cover the damage to the car, to the children, but may not be enough for your own damages. Having the extra coverage would be a smart thing to have.
Non-owners is also great for drivers in need of an SR-22 or FR-44. If you need an SR-22 to get your license reinstated, but also require insurance to do so, that may be hard if you do not own a car. That’s where this policy comes in handy. The company you get the policy through can file the SR-22 on your behalf and get you on your way to a license reinstatement. The cost effective nature of it is also perfect since fees for reinstating a license can already be quite costly.
- People who own a car
- People who borrow a friend's or relative's car frequently
- People who use a company car only for business
Essentially, if you own a car this insurance is not for you. If you want extra liability protection, an Umbrella policy would do you better. If you are a young driver, and drive your parents’ cars, it could be an option if they do not want to carry the brunt of adding a young driver to their policy. You will have to weigh the cost of the non-owners policy and the cost of adding you to your parents policy to see which is the most affordable.
You don't technically need non-owners insurance if you're driving someone else's car with their permission. If you get into an accident with a friend's or relative's car, they are liable for the accident. So if you have a very generous friend who does not mind filing a claim on your behalf, then you don't need to buy the insurance. If you did have the policy however, it would serve as a secondary coverage that could split the costs with your friend to ease their burden. Remember though that if you live with your friend, and use the car often, the insurance company will expect you to be on the main policy.
Finally, if you drive a company car, as in, the car you drive the most is owned by your company, the situation can be a little complicated. If you drive the car exclusively for business and you do everything your employer asks, then the company, or their insurance, will cover any accidents. Getting Non-Owners wouldn’t make much sense in this case. If however you use a company car for leisure activities. For example, you take the car home with you and drive anywhere you like, then this policy may be useful. Any accident incurred while using a company car for leisure activities will most likely not be covered by the company, making you liable.
There are two major limitations to this coverage. The first is the number of companies that offer it. As of now the following companies offer Non-Owners coverage.
List of Companies That Offer Non-Owners Insurance
- State Farm
- The General
The biggest exclusions from that list are Allstate, Farmers and Liberty Mutual, some of the largest providers in the country. Luckily the inclusion of GEICO, State Farm and Progressive make it likely that no matter where you are, you should have this coverage available.
The second limitation is a bit greater than the first. Essentially, since companies issuing this insurance do not know which type of car you are driving, be it expensive or cheap. They cannot confidently give you collision or comprehensive coverage. Meaning, if you got into an accident, your insurance would only cover vehicle or medical damage to the person you got into the accident with. Some companies will also offer medical payments and uninsured motorist with a Non-Owners policy. Medical payment would cover your own medical expenses, while uninsured motorist would cover damage to you if the at-fault driver had no insurance. Without comprehensive or collision though, you wont be able to cover damage to your car if you are at-fault for an accident or if an "act of god" caused damage to your car.