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What Is Non-owners Car Insurance?

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:

 Some insurers also offer as part of a non-owners policy:

 Because a car is not attached to a non-owners policy, you will NOT be offered the following types of 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. 

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