The basics of auto insurance seem very simple on the surface. You have a car, you want to drive it, so you get a driving license and of course, an auto insurance policy. The type of auto insurance policy is also easy to understand; get liability insurance with the minimum coverage limit and you are good to go. There are however some instances when things get complicated. For example, what if you want to drive, but you don’t have a car. Or when you get your license suspended? 

Insurance companies will not give you any auto insurance policies if you don’t have a registered car to your name, or if your license has been suspended. And walking 20 miles every day to your work or for other emergencies is not the best idea, and neither is driving without auto insurance. This is where non-owner car insurance policies come in and it can save you from a lot of hassle, and legal trouble as well. 

What is Non-Owner Car Insurance

The great thing about the names of some auto insurance policies is that they are self-explanatory. A non-owner car insurance policy is an insurance policy for someone who does not own a car. But why can’t people with no car get an auto insurance policy? 

Insurance companies are risk management companies. These companies charge a fee to take your side of risk so that in case of an accident caused by you, you don’t have to pay from your pockets. This is applicable when you have a car that’s registered to your name. When you don’t have a car (that you own), then there’s an issue of insurable interest. 

Insurable interest means that the car (that you don’t own) is not in your financial interest. Since you have not invested your money in the car, you don’t have any stake in it. Why would you care to drive the car carefully? The chances of you crashing or damaging the car is higher when it is not your insurable interest.

This is when non-owner car insurance policies come in. This insurance policy allows you to get car insurance even if you don’t own a car or you are renting a car for a trip. Non-owner car insurance is your best option if you intend to drive someone else’s car or rent a car often. 

What Does it Cover

Non-owner car insurance coverage is exactly like liability coverage. It has three different coverage, one for bodily injury liability per person, one for bodily injury liability per accident, and property damage liability. The coverage limit depends on the policy you choose and the price of the policy. 

Do note that non-owner car insurance policies can be a bit expensive since they are taking on more risk than normal insurance policies have. This is why you should compare as many insurance companies as possible and look at their prices. Get the non-owner insurance policy that costs the least, has the lowest premium rates, and provides the best coverage.

What Non-Owner Insurance Does Not Cover

Non-owner insurance just covers the liability and it can be claimed by the other person, not the policyholder. For example, if you cause an accident and the other person sustains injuries and damages to their car or property, your liability coverage will pay for the medical treatments and repairs of the vehicle. 

Non-owner insurance policy does not cover collision or comprehensive insurance policy. This means that any damage to the car that you are driving will not be covered under this policy, whether it is parked or moving. You’ll have to pay from your pockets for the repairs. Since it also does not include comprehensive coverage, if there is any damage to your car due to hailstorms, fire, earthquakes, and other natural calamities or theft, well, tough luck. 

When Do You Need Auto Insurance

Most of the time, if you own a car and want to drive, general insurance is enough. If you want to drive your friend’s car or maybe a car that belongs to someone in your family, you can request them to add you as a driver to their insurance policy and that would be fine. But there are specific cases when you need to get a non-owner car insurance policy.

Suspended License 

If for some violations your driver’s license has been suspended but you need to drive a car for emergencies and commuting to your office, you can apply for a non-owner car insurance policy (as insurance companies won’t give you a general policy), along with an SR-22 or FR-22 form that proves you have an auto insurance policy. Remember that SR-22 is just a legal form that shows you have an insurance policy. It is usually provided by the insurance company once you get a non-owner insurance policy. 

You’re a Serial Car-Renter

Some people spend their lives avoiding the road, while some spend most of it there. If you belong to the latter, and you rent cars a lot, then a non-owner insurance policy is the one you should get. It helps you save cost, provides the coverage you need to drive securely, and does not require you to show a registered car to your name. Just note that some car rental companies will make you pay extra for comprehensive and collision coverage.

Cost of Non-Owner Insurance Policy

The cost of a non-owner insurance policy depends on multiple factors, just like general auto insurance policies do. Important factors such as your driving record, previous insurance claims, the amount of coverage, your age, gender, etc are considered when deciding the cost of the insurance. 

If you have had your license canceled, you will have to pay a higher amount for the policy since the insurance companies see you as a high-risk individual. A ballpark figure for the average cost of a non-owner insurance policy would be somewhere around $250 to $650 per year. There is a chance that you might get a higher quote than this estimate, but for most people, this will be a range.