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Non-Owner Car Insurance: What You Need to Know

A young, Caucasian woman receiving car keys from a friend who lent the car to her to illustrate what is non-owner's car insurance

Updated April 19, 2022

What is Non-Owner Auto Insurance?

Non-owner car insurance is for those who frequently find themselves behind the wheel but do not own a car. In most cases, car insurance follows the car, but in the case of non-owner car insurance, the insurance follows the driver. Since the insured does not own a car, there is no need for other coverages, such as comprehensive or collision. And no, you cannot get non-owners auto insurance if you own a vehicle – and, in many cases, even if you live with someone who owns a vehicle.

This car insurance for non owner provides extra peace of mind in case you borrow a car and do more than just crush someone’s fender. A non-owner car insurance policy provides an individual with liability coverage, including property damage and bodily injury coverage, if they are at fault for an accident when driving a vehicle they do not own.

If you’re driving a car owned by someone else that is insured for comprehensive and collision coverage, the insurance will cover the costs to repair the vehicle you were driving if you’re in an accident or experience a destructive act of nature, like having a tree fall on the car.

However, their liability insurance coverage may be limited depending on what coverage they opted for. This means that if you cause an accident where someone is seriously injured and don’t have enough liability insurance to foot the costs, you may be personally responsible for their medical bills or car repairs.

Non-owner car insurance covers this gap and protects you if you cause property or bodily injury damage in an accident. If you’re uninsured, these costs can be quite expensive to handle on your own. The average auto bodily injury claim in 2018 was $15,785, while the average property damage claim was $3,841.

In addition to liability coverage, non-owner insurance can also provide:

  • Uninsured/underinsured motorist coverage, which would help pay for property damage and bodily injury claims if you were involved in an accident with an uninsured driver or someone who does not have enough insurance to cover the damage.
  • Personal injury protection, which would cover medical expenses in case of an accident — regardless of who was at fault.

How Much Is Non-Owner Car Insurance?

The average cost of non-owned auto insurance is $474 per year.

Like a standard insurance policy, non-owner premium rates are based on factors such as your age, where you live, how much coverage you have, and how high of a deductible you select, among other factors. However, since a non-owner insurance policy only provides liability coverage, it is often significantly more affordable than a full coverage auto insurance policy.

For reference, the average cost of auto insurance coverage, including liability, collisions, and comprehensive coverage in the United States in 2020 was $1,665. So, expect your policy to cost a lot less than that! Using California and Texas as examples, the average cost for just liability insurance in 2020 was $733 and $496, respectively. Non-owner car insurance is often even cheaper than that.

Given the affordability, a non-owner SR-22 policy can be an excellent option for a driver who wants to work on getting their license reinstated or a family seeking the cheapest insurance for young drivers who don’t own a vehicle.

How Does Non-Owner Insurance Work?

Non-owner insurance policies only cover the individual who purchases the coverage. This means it won’t protect your spouse or kids. They’ll need to have separate policies if they’ll also be driving a vehicle that isn’t theirs.

It’s typically used as secondary coverage to current insurance on the driven vehicle. This means you’ll need to exhaust the car owner’s primary insurance coverage before your individual policy kicks in. Because of this, you won’t have to pay a deductible for coverage to be applied.

Let’s take a look at an example to get a better understanding of this. Imagine you borrowed a coworker’s car and accidentally ran a red light that results in an accident that causes $30,000 in property damage.

Suppose your coworker has $25,000 in property damage liability coverage. In that case, you could use your non-owner insurance to pay the remaining $5,000 in damages — as long as your coverage limits are $30,000 or higher.

If your non-owner insurance policy’s liability limits aren’t greater than those of the car owner’s insurance policy, they won’t cover the remaining damage. For example, if you only had $25,000 in property damage liability coverage on your policy, then it wouldn’t cover the remaining $5,000 in damages. You’d have to pay those out of pocket.

That’s why most people use non-owner insurance as a way to add additional liability coverage. It offers peace of mind should you ever get into a serious car accident.

Can I Insure a Car I Don’t Own?

Typically, if you have no monetary interest in a vehicle, insurance companies are reluctant to issue you a car insurance policy on that vehicle. Additionally, doing this is illegal in some states. But it can be done if the conditions are right.

If you have no financial interest in a vehicle, it’s hard for insurance companies to trust that you’ll be motivated to take care of that vehicle. If you are in a state where this is not illegal, you may be able to get insurance on a car you do not own by adding the owner of the car to your insurance policy. All other methods effectively make you an owner or co-owner of the vehicle.

Taking out a non-owner car insurance policy is going to be your best bet.

Who Should Consider a Non-Owner Car Insurance Policy?

It’s pretty clear that a non-owner insurance policy has a huge financial benefit. If you cause an accident, you could suddenly owe another driver a lot of money. If you don’t have the funds to pay up, you could be in serious legal trouble.

That said, not everyone needs a non-owner car insurance policy. Here’s a quick look at (5) individuals who might be a good fit for non-owner car insurance.

1. Drivers Who Frequently Rent Vehicles or Use Car-Sharing Services

Most states do require car insurance companies to offer some kind of liability insurance with every car rental. That said, these coverages are usually the bare minimum and won’t provide you much in the way of financial protection in an accident.

As an example, in California, this is only $15,000 for bodily injury liability per person, up to $30,000 total, and $5,000 in property damage liability. In Florida, this is even worse, with just $10,000 per person ($20,000 total) and $10,000 for property damage.

While you can buy the add-on insurance each time you rent a car, this can quickly add up to more than an annual policy would cost. That’s why you might be better off just carrying a cheap non-owner car insurance policy year-round.

2. Drivers Who Borrow Vehicles Frequently

Borrowing a car from a loved one can be a great way to avoid splurging on your own vehicle. That said, you’re at the mercy of their insurance policy. If they happen to have low liability coverage limits, you’ll be on your own when it comes to paying for costs after an accident.

Additionally, you won’t be a customer of their insurance company, so you could run into difficulties managing your claims. When you have your own policy, you’ll get to choose your exact coverage limits as well as the company you deal with.

3. Drivers Who Had Their License Revoked, Need to File an SR-22 and Do Not Own a Vehicle

An SR-22 is not a type of insurance; rather, it’s just a form saying that you have insurance coverage. This is often required if you’re caught driving without auto insurance, driving under the influence, or having another major moving violation. Your insurance company will automatically send this form to your state’s department of motor vehicles once you have a policy. Usually, you’ll need to file an non-owner SR-22 car insurance for three years after your initial court order.

This is easy enough to figure out if you have a vehicle and get an insurance policy on it. But what if you don’t own a vehicle? A non-owner insurance policy lets you satisfy this requirement, so you don’t get in more trouble with the law.

4. Drivers Who Sold Their Car but Want to Avoid an Insurance Coverage Lapse

A driver who does not have insurance for an extended period could have trouble purchasing coverage again or wind-up paying much higher rates in the future. An insurer might question why there was such a large gap between policies, especially since it’s legally required in all states to maintain car insurance on your vehicles.

Even if you don’t have a car right now, maintaining your insurance coverage could help you maintain your long-term customer status so you can still qualify for deals and discounts. It also saves the hassle of explaining why you were without insurance.

It’s unlikely, but if one of your employees gets into an accident with their personal vehicle while doing a work-related task, your company could be at fault for the damages. This can include anything from picking up lunch for the office to running a corporate errand.

While you can create corporate policies to help make drivers safer on the road or maintain some company vehicles they can drive, there’s no way to eliminate all chances of an accident. Having non-owner insurance coverage for your employees can keep your company safe from financial ruin after a catastrophic event.

Young man dangles car keys for rental car

Who Doesn’t Need a Non-Owner Insurance Policy?

Now that we’ve established who could benefit from a non-owner insurance policy, let’s take a look at who doesn’t really need one.

1. Drivers Who Own Their Own Car or Live with Someone Who Does

If you own your car, you should have a primary insurance policy that already comes with liability coverage. That means there’s no need for non-owner’s insurance.

Also, if you live with someone who owns a car that you drive, rather than taking out a separate policy, just have yourself added to their policy. That way, you’ll get all of the coverage of their policy without having to pay more.

2. Drivers Who Borrow a Car Infrequently

If you really only borrow a car every once in a while, it may not be worth it to have a non-owner insurance policy. Yes, you won’t have that extra protection if you get in an accident, but since you’re not on the road every day, your chances of getting in that accident in the first place are extremely low.

3. Drivers Who Drive a Company Car

If you do all of your driving in a company car, you’ll be covered by your employer’s insurance policy if you’re in an accident. That said, if you’re using your company car for personal errands, you should look into a non-owner insurance policy to cover yourself off the clock.

What Is Not Covered by a Non-Owner Insurance Policy?

While a non-owner car insurance policy offers a ton of protection, it’s not completely comprehensive for every scenario. A non-owner car insurance policy would NOT provide:

  • Collision or comprehensive coverage to protect any vehicle you drive. If you felt bad about wrecking your coworker’s car, you can’t rely on your non-owner’s policy to cover the damage. Because non-owner insurance only offers liability coverage, it’s up to their policy to cover that damage.
  • Coverage options for a driver who lives with other vehicle owners. For example, if there’s a new teen driver in your household without a car and you are seeking young drivers’ insurance for them, their own non-owner’s insurance policy is not an option if you already have a vehicle. The teen driver would need to be listed as a driver on your existing policy.

How Do I Get Cheap Non-Owner Car Insurance Coverage?

Non-owner coverage is relatively easy to obtain, and you may only need your driver’s license and credit card numbers. While having some infractions on your driving record can increase your costs, you can still find affordable non-owner car insurance coverage if you choose a provider like Freeway Insurance.

Get a Non-Owner Car Insurance Quote Online Today

Freeway Insurance offers affordable car insurance for non-car owners that you can trust. Get your free non-owner car insurance quote today so you can feel safer on the road.

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