What is Non-Owner Car Insurance?

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If you’ve already taken out health insurance, life insurance, home insurance, and car insurance, the last thing you want to hear is that you need to take out yet another insurance policy.

It’s true that most people have never heard of non-owner car insurance, but that doesn’t mean you don’t need it.

Many people are unknowingly putting themselves at risk of financial ruin by driving with the inappropriate cover.

If you’re a frequent car renter, car borrower, or user of car-share services, then you could be one of them.

Read on to find out how non-owner car insurance works, if you need it, and the best companies to buy this mysterious insurance option from.

What Is Non-Owner Car Insurance?

non owner car insuranceInsurance is a complicated domain, and auto insurance is even more complex.

Taking out a standard car insurance policy isn’t a complete guarantee that you’ll be covered in the case of an accident – if you were driving the wrong vehicle or for the wrong purpose, it might turn out your coverage isn’t applicable. This can be financially devastating.

Nevertheless, most people know the basics, like driving in a vehicle you’re actually insured to drive. What many people don’t realize is that you might need car insurance even if you don’t own a car at all.

Non-owner car insurance is here to cover those gray areas most people never consider.

How Does Non-Owner Car Insurance Work?

There are different features of non-owner car insurance that you need to be aware of to understand how it will work.

Limit

One of the most important features of non-owner insurance is the limit: the maximum amount the insurance company will pay out if an accident happens. Of course, this should be as high as possible to prepare for all eventualities.

Coverage

Another important detail is what kind of situations will be covered by insurance. Because there’s no specific vehicle involved, certain costs will never be covered. These include collision, towing, and rental reimbursement. However, bodily injury liability and property damage liability are likely to be included.

Bodily injury liability insurance covers medical expenses and lost wages, while property damage liability insurance covers damage to the vehicle or property of someone. Many non-owner insurance policies don’t cover the latter, but it’s certainly very useful to have.

Type of Non-Owner Car Insurance

You can choose between hired non-owner car insurance, which is specifically for those who only hire vehicles, and general non-owner car insurance, which is also suitable for owned or non-owned vehicles. The choice you opt for depends on the reason you wanted to take out non-owner auto insurance in the first place.

Policy Ownership

Another key detail is that non-owner car insurance belongs to one individual only – the same policy cannot cover multiple drivers. Sometimes, it’s also necessary for nobody in your household to own a vehicle, as frequently using the car of somebody in your household would be an inappropriate use of non-owner insurance. In this case, you should be added to their vehicle policy instead.

When To Take Out Non-Owner Car Insurance

If you’re driving somebody else’s car, you might assume the owner of the vehicle has an insurance policy that will cover any accident.

However, if their policy coverage isn’t comprehensive enough, your policy will come into the forefront – without non-owner insurance, you could be liable for the damages not covered by the owners.

When You Do Not Own A Car

If you’re normally insured for your own vehicle but are going through a period without coverage, it’s best to purchase non-owner car insurance to avoid paying higher rates when you do want a vehicle again.

When You Use Rental Cars

Another common reason for taking out non-owner car insurance is the frequent use of rental cars or car sharing services like Zipcar, Car2Go, or Maven. Although these services and rental packages include some basic coverage, it’s a good idea to take out your own policy for full protection. Again, if the coverage isn’t comprehensive enough, then you’ll be liable without non-owner insurance.

When Required By Court

More unusually, you may be required by the court to take out non-owner car insurance. If this is the case, you’re sure to know about it – it generally happens when people are involved in traffic accidents (like DUI or reckless driving) and required to maintain constant car insurance to keep their license. In some cases, you may also require liability insurance to keep your driver’s license.

When You Drive A Company Car

Finally, a slightly more complicated case is using non-owner insurance for a vehicle that is used by employees but not owned by a business – including employees’ cars. Business auto insurance only covers accidents when the company owns the vehicle in question, so if an employee runs an errand for a company in their own car, the company could end up being held accountable. This means that business owners may need to take out non-owner insurance if employees use their own car for business purposes. If the vehicle is owned, contracted, or registered by the businesses, then the coverage may not apply. Progressive offers great commercial auto insurance.

To sum it all up for you at a glance, here is when you DO or DO NOT need to take out a non-owner car insurance policy.

When You DO Need a Non-Owner Car Insurance Policy:

  • Driving a friend’s car frequently
  • Renting cars frequently
  • Using a car-sharing service
  • To ensure continuous coverage
  • Required to by court
  • Businesses that don’t own cars

When You DO NOT Need a Non-Owner Car Insurance Policy:

  • Using the car of someone in your household
  • Driving your own car
  • Cars owned by your business or employer

How Much Is Non-Owner Car Insurance?

The good news is that non-owner car insurance is almost always cheaper than standard auto insurance. Those who take out non-owner car insurance almost always drive cars less frequently, and they’re likely to be covered by another insurance package to some extent, so the lower price tag makes sense.

The average cost of non-owner car insurance in the US is $474, but this figure is slightly misleading since car insurance costs vary hugely between states.

The cost of car insurance in Michigan is a whopping $1,090 on average, whereas in Wisconsin, the cost is just $171.

Why the difference? States are made up of different demographics of people, and some areas experience many more accidents than others – both geographical and demographic factors affect the rate of insurance.

The risk profile of the individual is very relevant. If you’ve been involved in an accident in the past or are deemed riskier for another reason (perhaps because you’ve not held your license for a long time), then your insurance will come out more expensive.

Factors like your age, marital status, and location are important too. You can check out your risk profile by looking at your driving record and credit-based insurance score.

If you need a non-owner SR-22 insurance policy or FR-44, this usually makes the cost of insurance higher.

Best Non-Owner Car Insurance Policies

Non-owner car insurance is more complex than other types of auto insurance and varies vastly depending on individual circumstances, so most car insurance companies refrain from giving the details of their policies online.

Some companies only offer non-owner insurance to existing customers, like Progressive. As a general rule, most large insurers offer non-owner car insurance.

Here are the top 12 companies that offer the best non-owner car insurance:

Liberty Mutual

Liberty Mutual is the third-largest property and casualty insurer in the United States and covers a wide range of insurance options.

You can bundle your home and auto insurance for savings of up to $782. It’s then possible to save even further – good driving behavior results in a saving of up to 30%.

Liberty states that the following factors affect the amount you pay: age, location, driving history, and other factors like a spike in accidents or the number of drivers on the road.

 

Dairyland Insurance

Dairyland is a Wisconsin-based company that now has a global presence and has been around for over sixty years. They specialize in coverage for cars and motorcycles.

They give non-owner car insurance suitable for all major groups who may need to take it out, including those who need continuous coverage and those who have incurred major violations for a DUI or DWI, as well as SR-22 and FR-44 insurance.

Their quotes are fast and accurate.

Dairyland Insurance Phone Number: (844) 242-4468

 

Geico

Geico (Government Employees Insurance Company) was originally established for government employees and military personnel only, although they now cater for people of all professions. They’re one of the best-known providers of auto insurance, and they also provide a non-owner option.

They stand out for their customer service – it’s quick to get passed on to a human representative after calling and get the information you need. Geico insurance is also available in all states.

If you already have an insurance policy with Geico, you might be able to get a discount when taking out a non-owner insurance. This is a clear advantage over competitors, none of whom seem to offer this (although it’s worth asking over the phone as a negotiation point).

Geico Phone Number: (800) 207-7847

 

State Farm

State Farm offers life, auto, and home insurance in all states. They’re an established company with almost 100 years of experience.

You can also add an SR-22 document to your policy for both owners and non-owners.

State Farm Phone Number: (800) 782-8332

 

Nationwide

A long-running auto insurer, Nationwide manages more than $158 billion in statutory assets. Their policies are available in all states.

They offer non-owner insurance for businesses, which can be acquired by talking to a professional insurance agent.

As a bonus, Nationwide is currently running a promotion where new customers are given a free Amazon Echo when taking out an insurance policy with them.

Nationwide Phone Number: (877) 669-6877

 

The General

The General Insurance Services, otherwise known as The General, are a subsidiary of PGC Holdings Corp. PGC has been an auto insurance company for over 50 years, so the company is a safe pair of hands for your car loan.

The General lets you pay by credit card, or by electronic check, in some states. They’re known for accepting most cars and drivers, even those with a history of accidents or bad credit.

There’s not much information specifically about non-owner car insurance on their website, but you can find out more by giving them a call. They accept customers in most but not all US states.

The General Phone Number: (844) 328-0306

 

Acceptance Insurance

Acceptance Insurance is one of the few non-owner auto insurance providers who allow customers to get a free quote online.

However, bear in mind that due to the complicated nature of this insurance, you’ll be more likely to receive an accurate quote by talking to an expert.

They offer a ‘no hassle, no obligation’ quote to make it easier for you to decide if the policy is for you or not.

Once you speak to one of their insurance specialists, you’ll find out more about how the policy works, what it might cover, and kinds of affordable coverage options.

Acceptance Insurance Phone Number: (877) 405-7102

 

American Family

Providing car insurance to American families for 90 years, American Family Enterprise is a family of companies aiming to be the most trusted in the industry. They have a strong focus on customer service and providing protection to customers.

American Family also has a MyAccount app you can use to pay your bills and get proof of insurance cards through and emergency roadside assistance, to ensure you’re covered if an accident does happen.

70% of customers bundle their car and home insurance together for more savings, so it could definitely be worth considering them as an option if you already have a home insurance policy with them.

American Family Phone Number: (800) 692-6326

 

Direct Auto Insurance

Direct Auto Insurance gives insurance out to all customers, regardless of history, including accidents or lapses in coverage.

They also aim to give all clients affordable rates, including down payments and discounts – even for those who are considered high-risk or who need SR-22 certification.

You’ll be able to choose a payment date and schedule that fits your budget and plans, and pay how you like. This guarantees the insurance policy is tailored to you.

Non-owner car insurance with Direct can only be purchased over the phone or by speaking to an agent in-store.

Direct Auto Insurance Phone Number: (877) 463-4732

 

Farmers

The Farmers Insurance Group of Companies has 90 years of experience and serves more than 10 million households. Now, they are one of the largest vehicles and home insurers in the country, providing multiple other financial services products too. They stand out for excellent customer service and easy-to-make claims – if you’re involved in a disaster, they may dispatch a special team to process the claim right there and then.

There are lots of resources on the website you can use to educate yourself further about car insurance policies, including common scenarios and commonly asked questions that might be relevant to you.

There’s also the possibility of getting a discount if you purchase multiple policies from them.

Farmers Insurance Phone Number: (888) 327-6335

 

Travelers

Boasting the longest history on the list, Travelers has been providing insurance for over 160 years spanning multiple countries – they’ve certainly earned a reputation for being a reliable insurance company.

Travelers lists a few ways to make additional savings through your auto policy with the company. Employees or members of certain businesses can participate in their Affinity Programs. Safe drivers in select states can join the IntelliDrive program by registering to have driving habits tracked by a smartphone app.

Travelers Discounts:

  • Bundling policies
  • Owning a home
  • Continuous insurance
  • Safe driving history
  • Paying policy in full, through ETF or payroll deduction
  • New customers who get a quote before current policy expires
  • Being fully enrolled in education and maintaining “B” or higher average grade
  • Completing an approved driver education course

That’s certainly some motivation to fit in those extra revision sessions at college and save up to pay all in one go!

Although non-owner auto insurance isn’t available as an option on the website, the company does offer it.

Travelers Insurance Phone Number: (800) 842-5075

 

USAA

The USAA (United Services Automobile Association) is a company that provides various financial services exclusively to current military members or veterans, as well as their families.

This, unfortunately, excludes a lot of people from taking advantage of their deals, but if you meet the criteria, it provides a great option – they claim new members save an average of $707 for car insurance, although this number is likely to be lower for non-owner insurance since it costs less than a standard car insurance policy.

One major perk is the flexible payment schedule – you can choose a more lenient plan without it costing more and pay nothing at the start of your policy if it suits you better.

Like Travelers, you can save money on your insurance by meeting unusual criteria, like being a good student and going through extra driver training.

The USAA mobile app lets you manage your policy, request auto ID cards, and get quotes directly from your smartphone.

USAA Insurance Phone Number: (800) 531-8722

 

Pros and Cons of Non-Owner Car Insurance

Still, confused about whether you need to take out non-owner insurance?

In some cases, it’s obvious, but in others, it comes down to the risks you’re prepared to take. Let’s weigh up the advantages and disadvantages.

Advantages of Non Owner Car Insurance

It’s dangerous to rely on the policies of people whose vehicles you’re driving. If they have minimum liability and you cause an accident while driving, a victim of the crash could sue you for damages. As sickening as paying out for something you might never need can be, it’s far worse to pay thousands because you weren’t insured.

Non-owner insurance could make renting cars cheaper. Most rental companies encourage customers to buy insurance with them, but this is more expensive than purchasing your own non-owner car insurance. However, you’ll still have to take out a collision damage waiver to cover any damage to the car.

A further advantage of being insured even when you don’t own a vehicle is that it avoids a gap in your history of insurance. Continuous coverage helps ensure low rates – just think of your future self. Even if you’ve never owned a car but are considering purchasing one in the future, non-owner car insurance is a great way of boosting your risk profile.

Disadvantages of Non Owner Car Insurance

The main disadvantage of non-owner car insurance is that it doesn’t cover all scenarios. Physical damage, vehicles you own, and vehicles owned by members of your household won’t be covered. For many people, it’s frustrating to pay hundreds of dollars on something that covers very few scenarios.

If you only use car renting or sharing services infrequently, it might not be worth it for you to take out non-owner car insurance. Due to the expense, it could work out cheaper to buy a more expensive one-off package on the rare occasions you do rent a car.

FAQS

What’s the best non-owner car insurance policy in North Carolina?

Geico, State Farm, Nationwide, and The General are available in all states, including North Carolina, and offer good non-owner car insurance policies.

Should I use my credit card policy?

Most credit card providers offer complimentary rental car insurance. It’s definitely worth checking what your provider offers as this can often be cheaper, and may provide a basis for negotiation with other companies.

Can a non-owner insure a car?

Non-owner car insurance is designed to cover any vehicles which aren’t covered by the individual. It, therefore, makes no sense to insure a specific car.

However, if you know that you’re using a specific car – like the car of your employer or somebody in your household – very frequently, you can be added to their policy or covered by a commercial insurance policy instead.

What is non-owner SR-22 insurance?

SR-22 isn’t a type of insurance but rather a document that you’ll need if you were involved in a driving accident and have been required by the state to obtain. A few states also require all non-owners to have one. In Florida and Virginia, FR-22 is needed instead.

Do You Need Non-Owner Car Insurance?

The decision over whether to purchase non-owner car insurance ultimately depends on your circumstances.

If you never drive a car that doesn’t belong to you or somebody in your household (who put you on their policy), then you’re unlikely to need it.

If, however, you often drive the cars of friends or while on vacation, it’s essential for covering yourself.

Remember to shop around. It might be annoying to ring agents to find out your rate instead of being able to fill out quick online quote forms, but the alternative is paying over the odds for something you could find cheaper elsewhere.

On the plus side, talking to an associate in person makes it easier to bag yourself a bargain!

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