What is Non-Owner Car Insurance? (And How Much It Costs)

If you don’t own a car, you likely think you don’t need car insurance, but you might need it after all.

If you often rent or borrow cars, you may not have adequate (or any car insurance ) and need coverage to protect you while you drive. If you cause an accident, you are legally liable for the damages. If there isn’t adequate coverage from the car owner, you could be on the hook for a lot of money.

Non-owner car insurance may provide financial protection greater than what you may have with other insurance policies, such as rental car insurance and may be worth considering. I highly suggest looking into it if you frequently rent cars or use car sharing services, like Turo.

What is non-owner car insurance?

A non-owner car insurance policy is a form of liability insurance for licensed drivers who don’t own a car. This coverage is also known as no-vehicle insurance.

No-vehicle car insurance provides liability coverage for property damages or injuries you may cause to the other driver in an accident. It can also help protect you from the financial liability of an accident.

In addition to bodily injury and property damage liability coverage, non-owner policies can provide liability protection against underinsured or uninsured motorists, medical payments, and personal injury protection.

What does non-owner car insurance cover?

Non-owner car insurance helps protect you against several types of liability. A standard policy provides:

• Personal injury liability protection: This protection helps pay for the medical costs associated with an injury the other driver sustains in a car accident that you cause.
• Property damage liability protection: This protection helps cover the cost of damages to another vehicle or property in an accident that is your fault.

Most states require all licensed drivers to carry a minimum level of liability insurance. For example, Wisconsin drivers must have the following minimums:

• $25,000 bodily injury liability protection per person
• $50,000 bodily injury liability protection per accident
• $10,000 property damage liability protection per accident

However, in Alabama, drivers must have:

• $25,000 bodily injury liability protection per person
• $50,000 bodily injury liability protection per accident
• $25,000 property damage liability protection per accident

I always suggest purchasing the most insurance you can afford, rather than focusing on state minimums. If the premiums are affordable, it makes sense to protect yourself financially against the worst case scenario.

Additional coverage for non-vehicle policies

Some no-vehicle car insurance policies may offer additional coverage in addition to liability protection:

• Medical payments: This coverage helps pay for medical bills for you and your passengers in the event of an accident, regardless of who was at fault.
• Underinsured or Uninsured motorist coverage: This coverage helps pay for medical bills or other damages if you are in an accident caused by someone who doesn’t have insurance or has inadequate insurance coverage.
• Personal injury protection: Also called, no fault insurance, PIP covers medical expenses for you and your passengers, as well as lost wages due to the accident, regardless of who was at fault.

Coverage not offered by non-owner car insurance

Non-owner car insurance doesn’t provide comprehensive or collision insurance. These coverages are typically offered as full coverage and don’t pertain to you if you don’t own a vehicle.

Comprehensive insurance covers non-collision damages like theft, vandalism, or weather-related damages. Collision insurance helps with the costs of damages following a crash, whether that's a single-car crash like hitting a telephone pole or a collision with another car. The car owner must file a claim with their insurance policy if there is damage to their vehicle.

How much is non-owner car insurance?

First, it’s important to know that a no-vehicle car insurance policy is often cheaper than a full-coverage car insurance policy. This is because the policy doesn’t include collision or comprehensive coverage that would pay for damages to a vehicle you own.

The average cost of non-owner car insurance is $474 per year, but the actual price you pay depends on the state you live in and your insurance company. There are several other factors that affect car insurance rates. These factors may apply to no-vehicle car insurance as well, including:

• Age
• Gender
• Marital status
• Education
• Occupation
• Driving record
• Credit score
• Driving history
• Number of miles you drive annually

I suggest shopping around to get the best deal. Getting quotes from insurance companies is free, and there’s no obligation to accept the offer. This allows you to compare cost and coverage to make the best choice.

Who should get non-owner car insurance?

A non-owner car insurance policy is a great fit if you don’t own a vehicle, but you often rent cars, borrow cars from friends, or use a car-sharing service such as Getaround or Zipcar.

You also might consider getting non-vehicle car insurance if:

• You are required to file an SR-22: If you’ve had a DUI or enough at-fault accidents that your driver’s license has been suspended, you may have to carry an SR-22 insurance form showing you have the minimum liability coverage required by your state. Your insurer can provide you with a non-owner auto coverage policy that satisfies the requirements to have proof of insurance even when you don’t own a car.
• You want to prevent a gap in your insurance coverage: A lapse or gap in your car insurance coverage can result in higher rates later since insurance companies may consider you a high-risk driver. Getting a non-owner car insurance policy keeps you covered until you switch to a standard policy.

How to find affordable non-owner car insurance

Not all insurance companies offer non-owner car insurance policies, and if they do they may only provide them for existing customers.

When looking for a policy, there are some simple ways to save money on car insurance, including shopping around, inquiring about discounts, and maintaining a good credit score.

Shop around

I suggest contacting three or four car insurance companies to compare auto insurance rates. Non-owner car insurance costs will vary by insurance company, your state, and your qualifying factors, such as driving history, credit score, and your location.

Ask about discounts

Most insurance companies offer various opportunities for discounts. When obtaining quotes, ask if discounts also apply to a non-owner car insurance policy.

Available discounts can include:

• Good driver discount
• Good student discount
• Customer loyalty discount
• Policy bundling discount
• Automatic payments discount

Maintain a good credit score

Your credit score and your diligence in paying your bills on time can impact your car insurance premium. The lower your credit score, the higher the premiums insurance companies often charge. A good credit score can help you get a lower premium.

FAQs

Bottom line

I highly suggest considering non-owner car insurance if you often rent or borrow cars. The liability protection you’ll receive protects you financially should you cause an accident. Even if you don’t borrow cars often, a no-vehicle car insurance policy can provide continuous coverage when you don’t have a car, but will in the near future to avoid excessive insurance premiums in the future.