What Is Non-Owner Car Insurance?

Quick Answer

Non-owner car insurance is a policy type for drivers who do not own a vehicle, but regularly drive a borrowed or rented one. It’s a good solution for those who like that extra peace of mind, especially when handling some else’s property.

A young man wearing a denim shirt smiles while touching his car radio.

Non-owner car insurance is a type of insurance for licensed drivers who don't own a car but may frequently drive one. Non-owner insurance also helps drivers avoid unwanted lapses in coverage, which could lead to a premium increase in the future should they decide to buy a new vehicle later.

Whether the cars you drive are owned by family members, friends or rental car companies, there are some things to know before purchasing non-owner insurance. Read on to find out what non-owner car insurance is, when you should consider buying it and what it covers.

How Non-Owner Car Insurance Works

Non-owner car insurance is secondary coverage that offers extra liability protection when, for any reason, a driver is operating a vehicle they don't own. It provides coverage to both the driver and the person who owns the car in the event of an at-fault accident, and pays for damages beyond the owner's coverage limits.

Let's say you're driving a friend's vehicle and get into an accident that's your fault. The damage you caused is valued at $30,000, but your friend's policy liability coverage caps at $25,000. If you have a non-owner policy with a liability coverage limit of $30,000 or more, your policy will kick in to cover the difference.

Non-owner insurance is available only to those who do not have regular access to a vehicle in their household. Even if you are not the owner but regularly use a car owned by a family member, roommate or friend in your home, you will not be eligible for a non-owner policy. Instead, insurance companies will require you to be listed as a driver on the car owner's policy.

If you are eligible for non-owner car insurance, you can only take out a policy for yourself; a spouse or children cannot be covered.

What Does Non-Owner Car Insurance Cover?

Non-owner car insurance policies may differ by provider and the state where you live, but generally always provide liability coverage. Liability coverage ensures that in case of an at-fault accident, your insurance policy will cover bodily injury and property damage costs incurred by the other party or vehicle.

In some states, non-owner insurance might offer additional coverage options, such as:

As a type of liability policy, non-owner insurance has some limitations you would not normally find on a standard auto policy. For example, it does not provide comprehensive and collision insurance, meaning your own medical bills or repairs will still need to be paid for out of pocket. Its sole purpose is to ensure that the other driver's expenses will be covered if you cause an accident.

Do I Need Non-Owner Car Insurance?

A non-owner policy can be a good idea if you do not own a vehicle but regularly borrow cars, rent cars or don't want a lapse in coverage if, say, your car was totaled and you haven't yet replaced it.

The policy usually costs less than a regular auto policy, and having it will ensure you do not have a lapse in coverage if you plan to purchase a vehicle in the future. Insurance companies may be unwilling to insure people with a gap in their coverage or may charge more for coverage.

That said, non-owner coverage is not a substitute for a standard auto policy. If you do own a car or use a car in your household regularly, you should purchase standard car insurance.

How Much Does Non-Owner Car Insurance Cost?

Insurance companies use many factors, such as your age, ZIP code, driving record and credit score, when calculating your premium. Because non-owner auto insurance provides coverage for one-off users, rather than everyday drivers, it tends to be significantly cheaper than standard auto insurance: The less time you spend behind the wheel, the less the likelihood of you being involved in an accident.

How to Get Non-Owner Car Insurance

Buying a non-owner policy can be more complicated than getting a standard policy because not every insurance company sells it. While companies like Progressive, Nationwide and Dairyland offer non-owner insurance, other companies may not.

If you already have another policy type, like homeowners or renters insurance, with an insurance provider you like, ask them if they offer non-owner car insurance. Adding the policy could unlock a multipolicy discount, which is a great way to lower your total premium costs.

Comparing insurance rates from several providers is always a good idea, but like with every non-standard policy type, it may be best to contact a licensed insurance agent to inquire about non-owner car insurance. Insurance agents and brokers can tailor your policy to your individual needs.