Non-Owner Car Insurance: The Ultimate Guide

Non-owned car insurance may sound strange to some, but it’s something you might want to consider if you are someone who often rents or borrows cars, but you don’t own one. Let’s say you borrowed a car and got into a car accident. If the car you were driving wasn’t yours, non-owner auto insurance would provide liability coverage that protects your assets.


And even if you only occasionally rent a car, if you drive other people’s vehicles often enough, non-owner car insurance is still something you might want to consider.  One of the most common reasons is because this type of policy can help you avoid a “coverage gap” if you are in-between cars and don’t need a traditional car insurance policy. Here’s what you need to know about non-owner auto insurance.

Many different cars stuck in traffic.

What Non-Owner Car Insurance Covers

Non-owner car insurance (also known as non-drivers insurance) covers property damage and bodily injury in case you get into an accident while driving a vehicle that you don’t personally own. If you are found to be at fault, non-owner auto insurance can protect you from lawsuits, similar to a normal liability policy.

Besides liability coverage that pays for property damage and injuries, non-owner car insurance may also include:

  • Medical Payments or Personal Injury Protection Coverage: hired auto liability policy pays for you and your passenger’s medical bills no matter who caused the accident.
  • Uninsured or Underinsured Motorist Liability Insurance: it pays for your medical expenses if someone crashes into you and they don’t have liability insurance at all or enough. This type of coverage also covers hit-and-run accidents, but that depends on the state.

It’s important to note that non-owner car insurance is secondary coverage. That means it works after any primary coverage pays.

For example, if you borrowed a car from a friend and caused an accident, your friend’s car insurance pays first (up to the policy limits). When the policy hits its limit, your non-owner car insurance can pay.

What Non-Owner Car Insurance Doesn’t Cover

There are several exclusions to non-owned auto coverage, including:

  • Damage to the Car You Are Driving: Hired auto coverage doesn’t include collision and comprehensive insurance, which covers problems like theft, fire, flood, vandalism, riot, hail, collision with animals, and falling objects. For example, if someone caused an accident to a car you were driving, the vehicle owner can file a claim under their collision and comprehensive insurance. They can also file a claim against the at-fault driver’s liability insurance.
  • Other Drivers: Non-owner car insurance policy only covers you, not other drivers in your household.
  • Personal Belongings: Non-owned auto insurance doesn’t cover personal belongings that are damaged, lost, or stolen. For example, if someone steals your briefcase from the car you borrowed, the policy won’t cover it.  

How Much Does Non-Owned Car Insurance Cost?

Usually, non-owner car insurance costs less than the same liability coverage for the vehicle you own. However, remember that if the insurer needs to file an SR-22 or FR-44, costs will likely be higher for any policy until you don’t need it anymore.

When it comes to non-owner car insurance quotes, the price depends on:

  • Your Driving History: Drivers who avoid car accidents usually pay less for car insurance.
  • Your Age: Young drivers who have less driving experience typically pay more than older drivers with more driving experience.
  • The Amount of Coverage You Want: The higher your policy limits, the more you can expect to pay. It’s usually a good idea to have a hired auto liability insurance amount that covers the assets you would risk in a big lawsuit, like your house or savings.

To ensure you pay the cheapest insurance rate, you should consider shopping around and comparing multiple car insurance quotes before you make a decision.

Do I Need Non-Owner Car Insurance?

Although you are not legally required to have auto insurance if you don’t own a car, there are a few reasons why you might need non-owner car insurance:

You Rent Cars Often

If you rent vehicles regularly, non-owned auto coverage could be cheaper in the long run compared to repeatedly buying rental car insurance. For example, if rental insurance costs $20 a day, it will likely add up to more than the annual cost of a non-owner car insurance policy.

Before you purchase non-owner car insurance, make sure that:

  • The policy provides liability coverage when you’re driving a rental car
  • Your credit card’s rental insurance covers damage to a rental car

The reason for that is because rental car insurance from a credit card doesn’t cover the legal fees in case someone sues you for damages. By combining your credit card rental insurance with the liability part of a non-owners policy you are providing the most comprehensive coverage.

You Use a Car-Sharing Service Often

If you are using car-sharing services that offer some coverage for drivers, you need to know that it’s often enough just to meet your state’s minimum requirements. And if you cause a bad wreck, costs could easily exceed the minimum limits. This is one of the common situations when a non-owners car policy would come in handy.

You Often Borrow Cars From Others

If you frequently borrow cars from other people, hired auto liability insurance may be a great choice for you. This policy ensures coverage every time you drive, so you don’t have to worry if the car owner’s insurance policy will cover you if there is an accident.

However, keep in mind that if the car you borrow belongs to someone you live with, they probably need to add you to their car owner’s insurance policy for primary coverage. Otherwise, even if you buy non-owner car insurance, the company that issued it may not cover you at all.

You Want to Maintain Continuous Coverage

If you are between cars and you go without auto insurance, it makes you look risky in the eyes of insurers, which leads to higher rates when you buy a vehicle. That said, it may end up being cheaper to buy non-owner car insurance than to skip coverage even if you are not driving a car for a short period of time.

State Law Requires You to File an SR-22 (or FR-44) Form

Your state might require proof of car insurance if you had problems like license suspension or revocation, DUI convictions, or you were caught driving without insurance. In these situations, non-owner SR-22 insurance is a good way to get auto insurance without owning a car.

The Bottom Line

Non-owner auto insurance is for everyone who doesn’t want to risk losing money if something unpredictable happens.

Even if you are a business owner and your employees sometimes use their personal cars for work reasons, such as making a delivery, purchasing non-owner car insurance may be a good idea. The policy extends the liability coverage from your commercial auto policy to employees’ personal cars and keeps you safe in case of an accident.

If you found this article helpful, you might also be interested in reading more about physical damage insurance.