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Don't Own a Vehicle? You Might Still Need Car Insurance

Colin GrubbSep 22, 2017

Car insurance isn't necessarily only for car owners. As counter-intuitive as it may seem, there are certain scenarios where holding a car insurance policy makes sense for those who do not own a vehicle, and many insurance providers offer non-owner policies to fit this niche.

Broadly speaking, these policies cover liability claims that may arise while renting or borrowing a vehicle. Should a claim be submitted, injuries and property damage will be covered, and this will save the non-owner driver from a potentially large financial hit.

Who Should Get Non-Owner Car Insurance?

  • Frequent Car Renters: In this case, a full-time non-owner policy may average out to being cheaper than consistently purchasing liability insurance through the rental agency.
  • Frequent Users of Car Sharing Services: While certain popular services like ZipCar come with basic liability policies, non-owner policies can expand this coverage. Should there be an accident, these expanded policies can further protect one’s holdings in the event of litigation.
  • Frequent Borrowers of Cars: Usually, when borrowing someone else's car, an accident would cause the owner’s insurance to kick in, rather than that of the driver. However, if the damages exceed the owner’s liability cap, the borrower would be at fault for the remainder. By taking out a non-owner policy, the owner’s liability cap would be supplemented and, therefore, protect the borrower’s assets.
  • Those who are attempting to apply for, or reinstate, a license after being found at-fault of a critical violation, such as a DUI. Many states, when considering such a request, look for proof of insurance as a factor. In many cases, non-owner policies fulfill this requirement.

What Non-Owner Car Insurance Covers

Beyond liability coverage, non-owner car insurance’s other features vary by state. With that said, additional coverages may include medical and uninsured motorist. Bear in mind, however, that non-owner car insurance does not include collision, or its resultant repairs, à la traditional car insurance. In the case of rental cars, one’s credit card can work in conjunction with liability coverage to mitigate fiscal risk, especially in the event of an accident.

How Much Do Non-Owner Car Insurance Policies Cost?

As with any form of car insurance, the ultimate cost of a policy is dependent on driving frequency, age, driving record, and geographic location. As such, it is hard to pin down an exact cost for any given plan. Generally speaking, however, non-owner car insurance policies will average out to be cheaper than the cost of a traditional policy’s liability coverage. This is chalked up to the fact that non-owners will be driving with far less frequency than owners. 

When a Non-Owner Policy Doesn't Make Sense

Put simply, non-owner policies do not make sense if the potential policy holder does not have consistent access to a vehicle, owns a car, or is already covered by an owner’s policy. With that said, if one finds his or herself in need of a non-owner policy, then it would be prudent to peruse and consult our top 10 providers of car insurance.