You don't own a car, but that doesn't mean you don't drive. The
auto insurance industry has a policy just for you.
Non-owners car insurance is often used by high-risk drivers who
are required to buy a liability policy to keep a driver's license.
But it is also used by drivers who don't own cars but who rent
frequently or are trying to keep continuous coverage.
A non-owners policy will generally cost much less than an
owner's policy - in the range of $200 to $300 annually -- because
the risk for an insurance company is lower than that of a car owner
who drives on a daily basis. The premium amount is, however,
dependent upon normal rating factors, such as your
driving record
and
where you live
, so you could pay much more than that.
Guidelines vary, but typically an insurer will require that:
- You have a valid driver's license.
- You do not own a vehicle.
- Some insurers also require that no one in your household owns
a vehicle and that you do not have regular access to a
vehicle.
Why would you want a non-owners policy?
As a car renter, the policy serves as primary liability
coverage, though you would still need to buy the collision damage
waiver (CDW) to pay for repairs to the rental car if your credit
card company does not automatically do so.
As someone trying to maintain continuous coverage, you are
avoiding a gap in your insurance history that would get you labeled
as a high-risk driver and result in higher rates when you do buy
your next car (and insurance policy.)
As a high-risk driver, the policy is typically needed to satisfy
conditions to receive or reinstate a driver's license. If you are
required to file an
SR-22
or
FR-44
with the state -- an insurance company's guarantee that your
coverage is current -- a non-owner's policy can satisfy that
mandate even if you don't own a car.
What does a non-owners policy cover?
Coverage under a non-owners policy includes:
- Bodily injury liability
- Property damage liability
Some insurers also offer as part of a non-owners
policy:
- Medical payments coverage
- Uninsured motorist bodily injury coverage
- Underinsured motorist bodily injury coverage
Because a car is not attached to a non-owners policy, you
will NOT be offered the following types of coverage:
- Collision
- Comprehensive
- Rental reimbursement
- Towing and labor
- Custom parts and equipment coverage
A non-owners policy will not pay for repairs to a car that you
borrow. In fact, if you borrow a friend's car, you need to verify
that the owner has a policy that will extend to you as primary
coverage. Your non-owners coverage would pay only in the event the
owner's coverage limits are reached, and then, only to cover the
damages inflicted on the person or vehicle you hit.
Who should not buy non-owners car insurance?
A non-owners personal auto insurance policy isn't for you
if:
- You own a car. In this case, purchase a standard owner's
policy.
- There is a vehicle in your household. Normally, in this
situation you would be required to be placed on the car owner's
policy as a driver to be covered instead of obtaining a
non-owners policy of your own. This is especially true if your
spouse owns a vehicle, since an insurer may consider that vehicle
your property to insure as well.
- You drive a car on a regular basis. If you don't own a car
but drive someone else's on a frequent basis, you should be added
to that person's policy as a driver or if in full possession of
the vehicle find an insurer that will allow you to place a
regular auto insurance policy on that vehicle.
- You are using a vehicle for business use. A commercial
non-owners policy, offered by companies such as Progressive, may
be better suited for this need.
- You don't have a driver's license and cannot obtain one
within 30 days of starting a non-owners policy.
How do I buy a non-owners policy?
You apply for a non-owners policy in the same manner you would
for an owner's policy, Not all auto insurance providers offer
non-owners policies because this is considered a non-standard
policy.
If you have been unable to find a carrier thus far, and we are
unable to offer you coverage in your area, then contact local
independent agents who have access to multiple non-standard
carriers or contact your state's insurance regulator for consumer
information on companies offering non-owner policies.
If you have a non-owner's policy and you purchase a vehicle, you
will need to let your insurer know immediately to change your
policy over to an owner's policy that will cover your new car -- or
else you'll be without coverage on the vehicle.