What Is Auto Insurance for Non-owners?

Apr 1, 2023 | Business Insurance

A non-owner insurance policy will protect you if you routinely drive but don’t own a car and are found legally responsible for someone else’s injuries or property damage in an accident. Your own injuries sustained in a collision or damage to the automobile you’re driving are not covered by non-owner auto insurance. Additionally, non-owner insurance policies sometimes cost less than regular auto insurance premiums.

How Does Car Insurance for Non-Owners Works?

Non-owner automobile insurance, through the liability protection the policy offers, assists in covering the damage or injuries to others if you cause an accident in a loaned car. Any auto insurance the car owner has on the vehicle is prioritized over non-owner insurance.

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Consider the scenario where you cause an accident while driving a friend’s automobile and your buddy has a $25,000 bodily injury liability limit but $38,000 in medical expenses for the other driver. You are now responsible for paying the remaining $13,000. The $13,000 would be covered if you had a non-owner’s insurance with a bodily injury liability coverage level of $50,000.

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What Does Non-Owner Auto Insurance Include?

The liability portion of non-owner automobile insurance provides the following coverage if you cause a car accident while operating a rental car or another borrowed vehicle:

  • Bodily harm you inflict on others, including costs for medical treatment.
  • You create harm to other people’s property, such as car repair costs or repair costs for broken objects like fences.
  • If you are accused of causing a car accident, a legal defense

You might be able to obtain medical coverage with a non-owner automobile insurance policy, depending on your state and the insurance provider, for example:

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Uninsured motorist coverage (UM): 

This insurance covers your medical costs if someone hits you but doesn’t have adequate or any liability insurance. Depending on your state’s laws, hit-and-run accidents may also be covered by uninsured motorist coverage.

Medical payments (Med Pay):

No matter who caused the accident, medical payments (Med Pay) coverage will cover your and your passengers’ medical expenses.

The secondary nature of non-owner auto insurance means that it only applies after any primary coverage has paid out. For instance, your friend’s auto insurance will pay out first, up to the policy limits, if you borrow their vehicle and cause an accident. Your non-owner auto insurance can then pay if the policy’s liability limits are depleted (up to your policy limits).

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What Does Non-Owner Auto Insurance Exclude?

Although non-owner auto insurance is intended to meet a driver’s essential liability insurance requirements, there are several typical exclusions:

Your vehicle suffering damage:

Collision and comprehensive insurance, which covers a variety of issues such automobile theft, fires, floods, hail, riots, vandalism, collisions with animals, and falling objects, are not included in non-owner auto insurance. You have the option of filing a claim under your own collision and comprehensive insurance or against the liability insurance of the at-fault motorist if someone else wrecks the automobile you’re driving.

You sustain injuries in an automobile accident:

Your injuries sustained in a car collision won’t be covered if the only liability insurance in your non-owner auto insurance policy is liability insurance only. You might be able to add medical payments coverage if you desire injury coverage.

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Other motorists:

Non-owner auto insurance packages typically only cover you, not your partner or any other household members who might drive. If someone lives in your home with a personal auto insurance policy, several insurance companies won’t let you have a non-owner automobile insurance coverage.

Commercial driving:

A non-owner automobile insurance coverage is probably not going to protect you if you’re using a vehicle for business activities, like delivering items to a client. A frequent exclusion for non-owner auto insurance coverage is business use.

Personal effects:

Your lost, damaged, or stolen personal property is not covered by a non-owner auto insurance policy. For instance, your auto insurance won’t pay you if your laptop is stolen from a borrowed vehicle. Your homeowner’s insurance or renters’ insurance may provide coverage for personal property.

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Reasons Why Non-Owner Car Insurance Is Not Necessary

You would not require non-owner automobile insurance for the following reasons:

You own an automobile:

You will require a standard auto insurance policy if you currently own a vehicle.

You travel in an automobile that belongs to a member of your family:

You ought to be included on the insurance policy of any household member who owns a vehicle, such as your spouse or parent.

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You occasionally use a friend’s automobile for a ride.

If you have a collision while operating a friend’s vehicle, their auto insurance will pay. But if you cause an accident and their liability insurance isn’t enough, you can be liable for any losses (such medical expenses or property damage) that aren’t covered by your friend’s insurance. If you frequently borrow cars, non-owner auto insurance might be something to think about.

You don’t drive car frequently:

You probably don’t need non-owners auto insurance if you drive infrequently or never. For instance, you don’t need to purchase a non-owner’s coverage if you live in a city and simply rent a car when travelling.

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Can you purchase auto insurance without a vehicle?

If you don’t own a car but want to drive another vehicle, you can purchase a car insurance policy. The damages or injuries you cause in an accident will be covered by your non-owner auto insurance policy’s liability protection. If the car owner’s liability limits are insufficient to fully cover the occurrence or if you are not eligible for coverage under the owner’s policy, non-owner insurance may be useful. Depending on the insurance company’s policies and the specifics of the accident, this may occasionally occur.

A non-owner insurance policy may additionally contain medical expenses, personal injury protection, uninsured or underinsured motorist insurance coverage in addition to liability coverage.

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Do I need auto insurance for non-owners?

In the following circumstances, purchasing non-owner auto insurance might be prudent:

Frequently borrowing automobiles: 

If you don’t have your own coverage and frequently borrow cars, you might want to think about getting a non-owner insurance policy. Find out more about car insurance for rented vehicles.

Using a car-sharing service: 

If you frequently use a car-sharing or short-term rental service, a non-owner policy can make sense because it extends your liability protection beyond what the provider offers.

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When renting a car frequently:

Liability coverage may be less expensive in the long term than purchasing it from the rental business each time. Liability coverage is necessary if you rent a car without having a policy. You might be able to purchase a collision damage waiver from the rental company to supplement your liability coverage from the non-owner policy, but it won’t cover any physical damage to the rental car. Find out more about insurance for rental cars.

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