What Is Auto Insurance for Non-owners?

Apr 1, 2023 | Business Insurance

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, a non-owner insurance policy will protect you. However, it does not cover injuries sustained in a collision or damage to the automobile you’re driving. Additionally, non-owner insurance policies sometimes cost less than regular auto insurance premiums.

How Does Car Insurance for Non-Owners Work?

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 defence

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 been 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?

Non-owner auto insurance typically excludes several scenarios, although it is intended to meet a driver’s essential liability insurance requirements.

Your vehicle suffering damage:

Non-owner auto insurance does not include collision and comprehensive insurance, which covers a variety of issues such as automobile theft, fires, floods, hail, riots, vandalism, collisions with animals, and falling objects.. You have the option of filing a claim under your 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:

If your non-owner auto insurance policy only includes liability insurance, it won’t cover the injuries you sustain in a car collision. You might be able to add medical payments coverage if you desire injury coverage.

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non-owner auto insurance

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 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:

A non-owner auto insurance policy does not cover your lost, damaged, or stolen personal property. For instance, your auto insurance won’t pay out if someone steals your laptop 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:

Own an automobile:

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:

Household members who own a vehicle, such as your spouse or parent, ought to include you on their insurance policy.

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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. Let’s say you cause an accident and their liability insurance isn’t enough, any losses (such as medical expenses or property damage) not covered by your friend’s insurance can make you liable. You frequently borrow cars, and non-owner auto insurance might be something to think about.

don’t drive a car frequently:

You probably don’t need non-owner 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. Your non-owner auto insurance policy’s liability protection will cover the damages or injuries caused by you in an accident. 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 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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