A non-owner car insurance policy allows drivers to have coverage when they rent or borrow a vehicle they do not own. It also covers someone who does not own a car but needs to have car insurance to get their driver’s license back after having it revoked. Non-owner insurance can be a relatively affordable way to make sure you're covered when you drive, even if you don't own a car.
A non-owner car insurance policy offers very specific coverage, including bodily injury and property damage liability coverage. It’s important to have this coverage because if you cause an accident while driving a car you don't own, you could be on the hook for costly medical and property damage bills. If you have non-owner insurance, you’ll be covered.
Bodily injury liability coverage, as part of a non-owner policy, comes into play if you are at-fault for an accident and someone sustains injuries. In that case, you're responsible for their medical care costs, short or long term.
If you're driving a car you don't own, and you're involved in an accident that causes property damage, such as to another car or someone’s house, you are responsible for covering the repair or replacement costs. Property damage liability policies don't cover damage to the car you are driving. Instead, that car is covered under its owner’s collision insurance or comprehensive insurance.
Non-Owner Car Insurance Costs
Non-owner car insurance costs much less than traditional car insurance. Factors that determine how much you pay for this type of insurance are much the same as those that influence your traditional auto insurance rates. Before giving you a quote, companies will want to know your age, sex, driving record, and use intentions. Some insurers may use your credit rating. These factors help determine your risk level based on historical risk data. The higher a risk you are, the more your policy will cost.
For instance, if you've received a DUI citation, you'll pay more for your non-owner car insurance policy because insurance agencies consider you a higher risk based on previous risky behavior. Other risk factors include multiple accidents and frequent claims for damage.
Do your research ahead of time. Know what you can afford, how much insurance you probably need, and the value of your assets. Get quotes from multiple car insurance providers and choose the best policy for you, not just the one with the lowest cost. Find out about any cancellation penalties or discounts for paying a significant amount upfront as opposed to monthly or bi-annual payments.
Who Needs Non-Owner Car Insurance?
If you frequently rent vehicles, use a car-sharing service, borrow other people’s cars, or need to maintain insurance coverage between vehicle ownership, you may want to consider this type of coverage.
Borrowing a Car
Most car owners have an insurance policy for their vehicle that covers people who drive their car with permission. However, if you're involved in a collision and the amount of damage exceeds the amount of liability an insurance policy covers, you may be responsible for the difference. A non-owner car insurance policy can cover expenses you may be responsible for in this situation.
If you rent a car, the rental company will offer you the opportunity to purchase an insurance policy that covers your rental car in the event of a collision, up to a certain predetermined dollar amount. If you frequently rent cars, purchasing your own non-owner car insurance policy may end up being cheaper than purchasing the car rental company's policy.
You Don’t Own a Car Now but Are Shopping for a New One
If you sell your car but don't immediately get a new one, you may want coverage while you’re without wheels, whether you're renting, borrowing, or sharing vehicles during that time. Having a policy while you’re between cars gives you continuous coverage, which helps keep your rates down overall, as most insurance companies see a lapse in coverage as a risk factor that raises rates.
You Drive a Company Car
If you drive a company car for work, your business should have an insurance policy that covers you in the event of a collision while on the job. Before you get behind the wheel, be sure that you have proof of insurance, such as an insurance card or a printed document. It will help set your mind at ease, and you’ll need the documentation in the event of an accident.
If your company hasn’t purchased what you deem to be an acceptable level of auto insurance, or their insurance doesn’t cover your liability, you may want to consider protecting yourself by purchasing a non-owner auto policy. To make this decision, you’ll want to weigh the cost of insurance with the value of your personal assets along with the coverage currently offered by your company.
Non-Owner Insurance and Revoked Driver’s License
A few special cases make having a non-owner car insurance policy a good idea. Most have to do with convictions for traffic infractions or criminal actions. If you've had your driver’s license revoked as the result of a criminal conviction like a DUI or a traffic infraction such as driving without insurance, you may be required to file a vehicle liability insurance document with the state, often called a SR-22 or FR44. When you file this form, you may be required to show proof that some sort of car insurance policy covers you, even if you don’t own a car. A non-owner policy is one affordable way to fulfill this requirement.
In some states, you can choose to pay a large deposit (upward of ten thousand dollars in most states) to get your license back. Non-owner car insurance premiums typically cost less than the deposit, though, and you can pay them monthly, as opposed to all at once.
State laws regulate how long you must carry a policy once you get your license back. Some require it for as little as three years while others can make it mandatory for five years. Cancelling the policy can trigger the insurance company to file a form with the state where the policy was issued to let them know that the policy no longer exists. This can serve as a warning to the state that you may be in violation of the terms of your license restoration agreement.
Should you have a lapse in coverage during this time, the state may revoke or suspend your license again. Getting a new policy may be pricier than it was before, and the state may impose additional financial penalties.
Who Doesn’t Need Non-Owner Car Insurance?
There are multiple scenarios where it doesn’t make sense for you to spend money on non-owner car insurance. It is important to carefully read the fine print of any car rental or ride-sharing user agreement to determine what type of coverage you need to best protect your assets.
If the insurance coverage offered by rental car and ride-sharing companies is enough to cover the total value of your assets, you probably don’t need a supplemental policy. An insurance agent can help guide you through the process to determine how much insurance is best for your lifestyle, taking cost and value into account.
Vehicle Subscription Services
Most companies that offer vehicle subscription services provide insurance as part of the package. These programs roll the cost of insurance in with the cost of maintenance, roadside assistance, and the fees associated with accessing the vehicle. As long as you keep up your monthly payments, your coverage should not lapse.
However, you'll want to check the amount of insurance coverage that comes with the subscription. If liability amounts are not enough to cover your assets, you may want to consider purchasing a non-owner car insurance policy to cover any additional costs beyond the liability amount related to an accident.
If you're purchasing a vehicle subscription for your another person, including your child, you'll want to make sure your assets (and not just your child's) are covered by a policy as well. An insurance broker can guide you through this process.
There are many different car-sharing platforms, and each comes with unique risks and rewards. When you rent a vehicle from a car-sharing service such as Zipcar, the user agreement usually includes the minimum amount of car insurance required by the state where the car is registered. These vehicles are often low-cost, mass-market cars that aren’t very expensive to begin with, helping to keep costs down all-around.
For a fee, many ride-sharing companies allow you to upgrade your coverage via their loan agreements. If you frequently use a ride-sharing platform and want better coverage in the event of a collision, see if it makes better financial sense to purchase your own non-owner car insurance policy or just pay for the policy upgrade with each loan.
If you pay for your ride-sharing experience with a major credit card, you may be entitled to car-sharing coverage provided by your credit card company. Benefits vary, so check with your credit card company for details.
Below are details of the insurance policies of some of the best-known ride-sharing companies in the U.S. Remember to read the fine print before you sign on the line. Policies are subject to change at any time. This information is current at the time of publication.
Members aged 21 and older who joined Zipcar on or after March 1, 2015, receive liability coverage of $100,000 for bodily injury per person, $300,000 for bodily injury maximum, and $25,000 for property damage. If you are over 21 and joined Zipcar prior to March 1, 2015, you receive liability coverage of $300,000 combined single limit per accident. All personal injury protection coverage is “no-fault” protection provided at the minimum amount required by law. Members are responsible for a $1,000 fee per accident, which you can reduce or eliminate if you purchase a damage fee waiver.
Car-sharing service Turo partnered with Liberty Mutual in the U.S. to provide customers with three levels of insurance coverage. The company's base plan covers renters with the state minimum amount for bodily injury and property damage. Turo's premium plan ups that amount to $1,000,000 combined single limit coverage per accident. These policies are secondary to any insurance you already own, meaning that they cover the leftover costs from your accident after your personal auto insurance policy tops out.
If required by state law, Turo provides personal injury protection as well as underinsured or uninsured motorist coverage at the lowest level allowed under the law.
The company’s basic plan requires a deductible of $3,000. If the damage is more than $3,000, you'll pay no more than $3,000. If damage is less than $3,000, you'll pay only for the cost of the repairs. Turo’s premium plan comes with a $500 deductible. Renters can also choose to decline coverage.
Car2go provides up to $300,000 in insurance coverage. The company charges users $1 per loan period to help offset the costs of the insurance during the user’s first 90 rides of a calendar year. There is no $1 fee for additional rides. The deductible for users is $250.
Maven provides the state required minimum coverage to all renters. A $750 deductible may apply to any damage done to the car. If the damage does not meet or exceed the deductible, you'll only pay for the cost of the damage. If damage occurs while you're using the car in a safe manner when the accident occurs, Maven promises that drivers will not pay anything beyond the $750 deductible.
Maven’s insurance policy does not cover non-members. If you allow another driver to use the car while you have it reserved, you can be responsible for a $500 unauthorized driving fee, and Maven can revoke your membership.
Peer-to-peer ride-sharing allows an individual to use an app to rent out their car to strangers or friends. However, those apps serve merely as a connection and payment tool. The company operating the app has likely absolved itself of any liability in the event of a collision via their user agreement.
If the owner of the vehicle has an insurance policy, it may cover them and a casual driver who has permission to use the vehicle but not a person who has permission to use the vehicle as the result of a business transaction, which is what peer-to-peer ride-sharing is. If an insurance company discovers that a vehicle they cover is being used for business, it can choose to not honor the terms of the policy, retroactive to the time before an accident, in accordance with some state laws. Some insurance policies allow for ride-sharing but only cover the driver, not passengers.
If you rent using this type of service and you don’t have your own non-owner car insurance policy, you're taking a great risk, as is the person renting you the car. In addition to accident-related damage, debris from the road or objects like a shopping cart may cause damage to a vehicle during your loan period. As the person who has possession of the vehicle at that time, you may be liable for that damage. If you don’t have proper coverage, those costs can be completely out of pocket.
Some insurance companies write policies specifically for people who rent out a vehicle as part of a peer-to-peer car-sharing program. Check with your local car insurance company agent to see if they offer this option. Remember to shop around for the best rates, and ask if bundling multiple policies can save you money.
Who Offers Non-Owner Car Insurance?
Not all car insurance companies issue policies in every state. If you currently have a renter’s, home, or life insurance policy, contact your broker and find out if they offer a non-owner car insurance policy that can be bundled with other policies. It may save you some money.
Currently, major insurance issuers, including Geico, State Farm, USAA, Nationwide, Farmers, and Travelers, offer non-owner car insurance policies. Regional insurers like Dairyland Auto Insurance out of Wisconsin and Serenity Insurance from Washington also offer policies. Make sure you shop around for the best rate.
If you frequently travel or split your time between two states (for example, if you winter in Florida but live in Michigan the rest of the year), make sure that whatever policy you buy covers you in each state.
Credit Card Coverage
Simply having a credit card does not entitle you to car insurance. Many people wrongly think they're automatically covered when they pay for a car rental or ride-share with a credit card. You’ll need to read the fine print in your credit card agreement to find out what, if any, coverage you're entitled to as a cardholder. It's not a bad idea to call your card company to verify your understanding of the fine print.