What Is Non-Owner Car Insurance?

If you own a car, then you are undoubtedly familiar with traditional auto insurance and how it works. You purchase a policy with an insurance company, and the insurer agrees to pay you in the event your car is damaged in a collision (or stolen). The coverage also reimburses you or others for medical expenses incurred as the result of an auto accident.

But there’s another type of policy called non-owner car insurance. This seems like an oxymoron; after all, if you don’t own a car, why would you need to buy car insurance?

Why Buy Non-Owner Car Insurance?

In reality, there are quite a few Americans who have a valid driver’s license and drive occasionally but have not purchased or leased a vehicle of their own. These people may primarily use public transportation, or live in an area where they can walk or bicycle to their destinations.

But that doesn’t meant they never drive (or never will). For example, maybe they borrow a friend’s car on occasion. Maybe they occasionally rent cars for business or pleasure. Or maybe they plan to get a car in the future and want to avoid terminating auto insurance coverage in order to remain continuously insured and receive lower premiums. Otherwise, gaps in car insurance coverage may signal that the person is a high-risk driver, and they’ll pay higher premiums whenever they do renew their coverage.

Also, non-owner car insurance can meet certain obligations which may be imposed upon a certain individual. For instance, if a person must apply to have his or her driver’s license reinstated (perhaps after receiving a DUI conviction), non-owner’s car insurance can satisfy an insurance requirement for a court even if a driver doesn’t own a car (or has had it impounded or totaled).

Who Isn’t Eligible for Non-owner Car Insurance?

As mentioned previously, people who own vehicles cannot qualify for a non-owner’s car insurance policy. This also applies in cases where there is a vehicle in the individual’s household that they use on occasion. In these examples, the driver would have to be added to the policy of the vehicle’s owner. Also, someone who drives a car for business cannot obtain a non-owner’s car insurance, nor can someone who a) does not have a driver’s license, and b) cannot obtain one within 30 days of the start date of a non-owner’s policy.

The Fine Print

Like traditional auto insurance policies, non-owner car insurance provides coverage for property damage and bodily injury liability. Customers may also have the option of purchasing coverage for medical payments as well as uninsured and/or underinsured motorist bodily injury liability. However, non-owner’s car insurance policies do not offer comprehensive, collision, towing, labor, rental reimbursement, or custom equipment and parts coverage — meaning that the premiums will be significantly lower than they would be for traditional auto insurance.

How to Obtain Non-owner Car Insurance

If you think that a non-owner car insurance policy would be right for you, simply contact an auto insurer to see about getting coverage. You would apply in much the same way you would with a standard car insurance policy, and your premiums would be based largely on your driving record, area of residence, and similar factors. Most importantly, if you purchase a vehicle while you have a non-owner’s policy, you must notify your insurer immediately; otherwise, you will not be covered under your current policy.

Non-owner car insurance can keep you protected and save you money – and it may be preferable to letting your auto insurance coverage lapse. So call your insurance agent today to see if you are eligible!

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