Non-owner car insurance policy is a type of insurance cover meant for individuals who are licensed drivers but do not own a car. Its design aims to protect the policyholder directly. It protects you in case of injuries as well as damages you cause to others while driving a car. This type of insurance policy does not protect the vehicle but the injured or damaged third party.

Non-owner car insurance policy, also known as secondary insurance, covers costs not addressed by the primary car insurance. Further, such policies only require the policyholder to meet a deductible after the coverage becomes effective. This suits individuals who do not own a car and rent one frequently. Car owners should buy comprehensive car insurance or third-party car insurance.

Inclusions in Non-Owner Car Insurance

Non-owner car insurance provides coverage if you cause injuries or damages to a third party while driving a borrowed or rented vehicle. The insurance covers:

Repairing or replacing damaged property
Medical bills in case of injuries caused to the other person
Legal fees if you get sued for causing an accident

Depending on the place where you live and the type of coverage you have, the plan could include some add-ons, such as —

Uninsured motorist coverage (UM): This type of insurance plan covers medical expenses if you hit someone and he/she does not have liability insurance. It also covers the hit-and-run case, depending on your state.

Medical payments: The insurance provider pays the policyholder and the passenger’s medical bills without considering who caused the accident.

Exclusions in Non-Owner Car Insurance

Non-owner car insurance does not include:

Coverage for collision, theft, fire, floods, hail damage, civil unrest, vandalism, etc.
Coverage for the damage caused to the car. It is usually covered by the vehicle owner or other driver’s insurance if they are at fault.
Loss or damage to personal items in the car. It can be covered only if you have renters’ insurance or a homeowner’s policy coverage for you.
Coverage for cars used for business-related activities. For example, if you are into delivery services, the insurance policy will not cover your car.

When should you consider buying a non-owner car insurance policy?

If you’re thinking about buying a car soon or currently don’t own one, getting a non-owner auto insurance policy might be a good idea. It can help you qualify for a continuous coverage discount, which many auto insurance companies offer if you’ve had car insurance for a certain period, often six months or more. However, it’s essential to calculate whether the discount justifies the cost of non-owner car insurance. This category of coverage can be especially beneficial for individuals who frequently rent cars or use car-sharing services. With this car insurance policy, you can avoid paying for the rental company’s liability coverage, which can add up on top of other rental fees. Nonetheless, analysing the financial aspect is crucial to ensure that the potential savings outweigh the insurance cost.

Does non-owner car insurance cover car rentals?

A non-owner car insurance policy does not provide comprehensive or collision coverage for rental cars. It only offers liability coverage when you cause injuries or damage to any individual while driving.

Obtaining Insurance without Owning a Car

You can purchase non-owner car insurance policies from several insurers. However, non-owner insurance cover provides liability coverage only.

Who should get non-owner auto insurance?

You should buy a non-owner car insurance policy if you do not have a vehicle but need to rent one frequently.

How does a non-owner insurance policy work?

Non-owner-car insurance policy covers only the policyholder. It does not cover any person’s spouse or any other driver.

In case of an accident, non-owner car insurance policyholders typically find that the car owner’s insurance pays first due to its connection with the vehicle. Non-owner car insurance is like a backup plan. It only comes into use if the car owner’s insurance plan does not cover anything. Moreover, you need not worry about deductibles with this kind of insurance.

Who does not need a non-owner car insurance policy?

You do not need to buy a non-owner car insurance policy if:

You own a car because then you should be investing in comprehensive car insurance or third-party car insurance
You live with somebody who owns a car
You do not borrow a car
Drive a company car

Are you eligible for insurance if you do not possess a car?

You qualify for a non-owner car insurance policy even if you do not own a vehicle.

Is buying non-owner car insurance expensive?

Non-owner car insurance policies are generally not that expensive. They are much cheaper than the regular insurance available for vehicles. It may cost 5-15 % less compared to the standard policy with similar coverage.